Telus to cut 1,500 jobs but hike dividend 5%
Telus Corp. says it's planning to reduce its workforce by 1,500 positions in an effort to cut annual costs by up to $125 million.
The Vancouver-based company, which operates one of Canada's biggest telecommunications networks, provided few details about the downsizing except that many of the cuts include voluntary departures and early retirements.
Telus also announced its dividend to shareholders will increase five per cent to 44 cents per share, payable Jan. 4, as well as a higher profit and revenue in its latest quarter ended Sept. 30.
Revenue was up 4.2 per cent from last year, rising to $3.15 billion from $3.03 billion in last year's third quarter.
Both net income and adjusted net income were up about 2.8 per cent, rising to $365 million and $398 million respectively.
The adjusted income amounted to 66 cents per share, which was up 3.1 per cent from last year and better than estimates.
Analysts had estimated 64 cents per share of adjusted net income and $3.16 billion of revenue.
"Our company continued to deliver solid financial and operational results in both our wireline and wireless businesses," Darren Entwistle, Telus president and CEO, said in a statement.
He also said Telus has just completed one of its biggest year's in terms of capital projects, which he described as "generational investments" that include initiatives to improve processes and efficiency.
"We are increasing our efficiency initiatives by an additional $125 million in the fourth quarter, which will include a net reduction of approximately 1,500 full-time positions, a notable number of which are voluntary departures and early retirements. These are very difficult decisions to make but a necessary element of aligning our organization with the growth, customer service and capital allocation activities we are implementing."
Patrick Horan, a portfolio manager at Agilith Capital, says the company is acting prudently to control costs in response to the economic slowdown in Western Canada.
"It's not surprising to me that they're having some revenue issues. Their backyard is Alberta. And there is a slowdown happening in Alberta and their cost-cuts are in response to that," he told CBC News.
Oil companies are cutting budgets on data services and telco services.
"When you reduce your staff by 2,000 people, those are 2,000 lines you no longer need," Horan said.