An unspecified number of One NZ staff will be laid off in the New Year. A consultation process is under way. It coincides with what chief executive Jason Paris calls a transition to an artificial
intelligence-led telecommunications company.

But the telco has not drawn a direct line between the two exercises. “This is not about AI taking people’s jobs,” spokesman Connor Roberts said.

The cuts come on the heels of recent cuts at Chorus and Spark (see below).

“One NZ is going through a process of consultation with a limited number of the team that regrettably will see some people depart the business in early 2024. We understand this will be hard on people, which is why we’re providing up to three months’ notice periods to take those affected through the holiday period and support them to look for new roles next year,” chief executive Jason Paris said.

The telco, owned by NZX-listed Infratil, currently has around 2500 staff, Roberts said. “We’re going through a process across parts of the business of identifying targeted efficiencies and are entering into a period of consultation with affected individuals and teams and I cannot confirm numbers until that has concluded.”

Paris said: “We are in a competitive market and the economy is challenging, but One NZ is in good shape and is delivering strong commercial, service and network performance results.

“The proposed changes are about ensuring we continue to invest even more in these important areas, as well as keep our prices competitive and build on our partnerships with the world’s best tech companies including SpaceX, Amazon, Google and Microsoft.

“We operate in the fast-moving technology and telecommunications space. That means changing our structure to ensure we’re best positioned for the future. Most recently the growth in importance of artificial intelligence has resulted in a new executive function and new roles being created, while we also need to make tough decisions to stop or reduce our investments in other areas at times,” Paris said.

Summer Collins was named to One NZ’s executive team as chief AI and data director on November 1, in an internal promotion. Collins will be responsible for One NZ’s transition to become an AI-led telco with customer experiences, products and ways of working fuelled by AI capability, Paris said.

Roberts said this morning: “AI is helping us deliver better customer experiences, by using the technology to analyse and bring to light things that used to be invisible and support people to deliver results.

“To be clear, we see these tools as an accelerator and amplifier of individual productivity. Our investment in AI and partnering with best-in-class AI providers has been built from adding in additional capabilities to the business. In terms of other key focus areas, we are investing in our network as you’d expect, and in continuing to improve our customer service.

“Our customer service is a good example where our people are already using AI tools to better understand their customers’ needs, and we are seeing improving satisfaction scores as a consequence.”

Tis the season: Stats NZ, Tomra cuts too

One NZ’s cuts were revealed on the same day that Statistics NZ confirmed 39 job cuts ahead of Christmas in a bid to save $2.4 million as the incoming Government goes on a cost-cutting drive. Stats NZ has about 1000 staff.

”This will be a shock to many workers and their whānau this close to Christmas and our hearts go out to them,” said Public Service Association national secretary Duane Leo.

New Zealand employees at food processor Tomra are also bracing to learn the full extent of cuts this week.

Spark, Chorus trim back

A spokeswoman for Spark said, “Like all businesses, we continue to ensure we are as efficient as possible, and in line with this, we recently made some changes in our cloud business CCL, as we implement our hybrid cloud strategy and align our business costs to changed revenue profiles.”

Spark bought cloud services business Computer Concepts Ltd (CLL) for $50m in 2015, and launched a “digital transformation consultancy” called Leaven in 2019. A recently wrapped-up restructure has seen the two business units merged and the Leaven brand dropped. Spark said affected staff would be “redeployed wherever possible”.

Asked how many were made redundant through CLL-Leaven streamlining, and if a wider consultation was now under way, the Spark spokeswoman said, “We don’t have anything further to share at this stage.”

On November 29, the Herald revealed that dozens of roles were being cut at ultrafast broadband (UFB) network operator Chorus. The firm framed them as part of its transition to a new operating model now that the UFB rollout is complete.

A 2degrees spokesman said the telco had no restructure planned or under way.

Timing of layoffs linked to economy

Shay Peters, chief executive ANZ for global recruitment firm Robert Walters, said the timing of redundancies before Christmas was a consequence of the macroeconomic situation faced throughout 2023.

“Companies are more likely trying to right-size for 2024, as it’s probable revenue lines won’t shift in half one next year, while costs of business keep rising,” Peters said.

“Keeping their current cost base, in a number of instances, may be an unsustainable position for them to take, and may put more jobs at risk in the medium to long term.

“We’re also likely to see cuts being made in the public sector as an outcome of the … new Government’s one hundred-day plan, with a commitment to lowering the headcount in the public sector.”

Infratil formed a 50:50 joint venture with Canada’s Brookfield to buy Vodafone New Zealand business in 2019.

In April this year, the telco was rebranded as One NZ.

In June, Infratil bought out Brookfield in a $1.8 billion deal to take full control (or near-full control as it boosted its stake from 49.95 per cent to 99.90 per cent; the balance of shares are owned by Paris and other senior executives.

At the same time, One NZ’s valuation was increased by around $1b to just over $3b.

Earnings up

One NZ saw operating earnings increase 8.3 per cent to $279.4m in the six months to September 30, thanks in part to strong performance in mobile, where the average monthly revenue per user jumped from $28 to $38. Infratil said the jump was the result of roaming revenue returning as travel continued its post-lockdown boom, and “annual pricing adjustments”, aka price increases.

Infratil said One NZ’s full-year ebitdaf (earnings before interest, tax, depreciation, amortisation and fair value adjustments) were on track to meet guidance of $580m to $620m, “with continued momentum in mobile and forecast completion of wholesale contracts and cost-out initiatives”.

Infratil shares closed on Friday at $9.92.

The stock is up 10 per cent for the year.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.