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M2 reveals People Telecom cuts

Chief executive of telecommunications provider M2 Vaughan Bowen today said the company shed 15 to 20 per cent of People Telecom's staff following its acquisition, but it also took on 140 of Commander's call centre staff.
Written by Liam Tung, Contributing Writer

Chief executive of telecommunications provider M2 Vaughan Bowen today said the company shed 15 to 20 per cent of People Telecom's staff following its acquisition, but it also took on 140 of Commander's call centre staff.

Vaughan_Bowan-M2.jpg

M2 CEO and founder Vaughan Bowen
(Credit: M2)

The company had let go of some of People Telecom's staff on day one of the acquisition, Bowen told ZDNet.com.au this morning, which it today claimed had netted it reductions in costs of around 25 per cent.

"There were some redundancies where there were roles that overlapped with our business. Something in the order of 15 to 20 per cent of the People Telecom team was made redundant," he said. Other savings had come from de-listing People Telecom from the Australian Stock Exchange and shedding its former directors.

M2 acquired People Telecom in December last year for $17 million, and followed that with the acquisition of Commander's small to medium business (SMB) arm, for $19 million.

M2 also recently renegotiated its wholesale deal with Telstra as it brought Commander's SMB arm under its network operating model. Commander's SMB business had previously used its own network. Bowen said the value of its wholesale business with Telstra was worth "well over $100 million".

"We had a major negotiation with Telstra to do with the Commander services, because we pulled Commander off its network. We had left the voice network behind and transferred it to our own wholesale agreement," said Bowen.

M2 had also hired Commander's former group general manager Geoff Horth to head up its People Telecom business at the time of the acquisition.

"Most of the restructure was driven by Geoff. He's now taken a wider operations mandate across the business," said Bowen.

M2 had secured 140 staff from Commander, of which two-thirds are based in Adelaide with the remainder in Sydney. Bowen said that M2 did not offer jobs to around 10 per cent of those in Commander's SMB arm. M2 did not buy Commander's voice network or its enterprise group.

M2's annual earnings are due to be announced on 27 August.

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