No credit cards for Telecom bosses as efficiency drive starts
Dec. 22 (BusinessDesk) – Telecom Corp.’s entire executive team has cut up its corporate credit cards, as the company starts an efficiency drive that chief executive Paul Reynolds is telling staff will put an end to the company “waffling around.”
In an article for its widely circulated staff magazine, Co., Reynolds outlines the company’s new three-year plan, called “Vision 2013”, which will see total staff numbers fall from close to 7,000 at present, and will introduce new disciplines on both operational and capital expenditure, and Telecom will be willing to abandon unprofitable markets.
“We have spent $4 billion in the last four years meeting … regulatory and customer demands,” says Reynolds. “But our market capitalisation has gone down $4 billion at the same time, which means we are not keeping our costs low enough to give our shareholders a return on capital.”
Savings of “at least $100 million” are being targeted from capital spending plans, while the company can save “tens of millions by just looking at the way we spend individually.”
“The entire executive team has cut up their credit cards, including myself,” says Reynolds. “We’re going to cut credit cards in Telecom to 1,000 from 3,500 in coming months.”
Meanwhile, Reynolds is also signalling a shake-up in the way the national telco does business internally, and with its partners.
“We’ve got poor accountability, we’re siloed in our decision-making, and our core processes and operations aren’t working well enough. That’s the challenge, and it’s a big one. While it might sound dramatic, we can’t afford to waffle around anymore.”
With respect to its product mix, Reynolds says that by 2013 “instead of being in every market, every segment, we would have chosen markets where we have competitive advantage and where there are profits to be made.
“By streamlining what we offer to the market, we will also be considering far more carefully the life cycle of products and how much they cost each part of the business to develop.”
Reynolds foreshadows “drastically reduced” bureaucracy and duplication, with “no more developing and delivering projects in siloes that may not benefit the business as a whole.”
There will be “fewer people working in the business”, although it is too early to which parts of the business will grow or shrink, he says. “But there will be fewer people. There has to be. We’re too big and too cumbersome.”
Natural workforce attrition would account for “some of those losses”.