Telecom NZ job cuts are no surprise as all are to blame

Both sides of New Zealand politics are to blame for the environment that Telecom NZ now operates in.
Written by Darren Greenwood, Contributor

The news that Telecom New Zealand is to lay off "hundreds" of people should hardly come as a surprise to anyone.

This is especially so for opportunistic opposition politicians who constantly seek to blame the New Zealand government, or those who are constantly at the telcos's throat — quite often the same people.

As Nevil Gibson of the National Business Review noted, New Zealand's opposition Labour Party is seeking to rewrite history over these and similar job losses at a government-owned coal company.

Job losses at Telecom have long been signalled, with recruiters last year reporting tough times for the telco sector, and singling out Telecom as a jobs shedder.

And last year, when Telecom appointed CEO Simon Mouter to his new role, I noted reports from others that Telecom was relatively overstaffed when compared with rivals.

Though Telecom has not been a state-owned entity since 1990, the government still sets much of the business and regulatory environment for it to work in.

And for this, the opposition Labour Party is equally guilty, if not more so than Prime Minister John Key, who was quizzed over the matter this week.

Gibson noted that Telecom's job losses stem from the structural separation of Telecom two years ago, when a demerger created Chorus, so its sister company could compete for the government's NZ$1.5 billion Ultra-Fast Broadband (UFB) work.

The Labour Party is complicit in this, too. Despite blaming the National-led government for the job losses, the party's IT spokeswoman Clare Curran accepted that some structural changes at Telecom are necessary.

Indeed, when Labour was last in power several years ago, it forced the operational separation of Telecom NZ.

Curran said herself that this was designed to allow further structural separation down the track.

And we must always remember the attacks from Labour and its supporters in the media when it criticised governments for awarding UFB contracts to Telecom/Chorus.

How many more jobs would Telecom have been shedding, had it not won so many contracts?

Thus, Telecom's critics, and Curran especially, must accept their share of the blame for Telecom's impending staff cuts.

When I set out to write this post, I had wanted to admonish the press for dragging the PM into the row, as if he is somehow to blame for the decisions of a private company, noting that Telecom NZ has been privatised for more than 20 years.

However, on reflection, we must consider that despite a supposedly more market-orientated environment, governments are still major players in the telecommunications sector, and thus the supporters of such government intervention should take their share of the blame for job cuts, too.

We might have supposed deregulated environments, but governments also intervene by the selling of licences for 4G networks, something that the New Zealand government announced last week; governments intervening or threatening to intervene over trans-Tasman roaming; the price of copper fibre access; our governments being behind the delivery of UFB; and so on.

Perhaps this was why our prime minister did not want to raise one positive jobs story about UFB, the news of 30 fibre-making jobs coming to Wellington, in case it meant he had to accept the bad along with the good. But had he done so, he could cleverly have added that his and Telecom's many critics should also take their share of the blame of the "hundreds" of job losses at Telecom that are still to come.

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