Telus eyes job cuts as wireless growth slows; shares fall

Thu Nov 5, 2015 10:37am EST
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By Alastair Sharp

TORONTO (Reuters) - Shares in Telus Corp (T.TO: Quote), one of Canada's three big telecoms providers, fell on Thursday after the company reported slowing wireless growth and forecast higher restructuring costs as it announced job cuts.

Shares in the company slumped 3.4 percent in morning trade to C$42.21, their lowest level in nearly three weeks.

The company reiterated its 2015 earnings forecasts, but doubled its expected restructuring costs to C$250 million ($190 million).

It said it will reduce its workforce by around 1,500 people over the next several quarters, with an eye to saving C$100 million to C$125 million a year. Telus had about 43,000 full-time employees in 2014, according to its annual report.

The company is spending billions of dollars to upgrade and expand its wireless and fixed-line Internet networks as it competes for wireless customers with BCE Inc and Rogers Communications Inc (RCIb.TO: Quote), and against Shaw Communications for television and Internet customers in Western Canada.

The Vancouver-based company added 69,000 net postpaid wireless customers, who typically spend much more per month than those who prepay.

That was a sharp decrease from a year ago and fewer than the roughly 77,000 customers both wireless market leader Rogers and network-sharing partner BCE added in the same period.

"A tougher double cohort quarter for wireless," RBC Capital Markets analyst Drew McReynolds wrote in a note, adding fixed-line earnings were a positive surprise.   Continued...

File photo of Telus Corp Chief Executive Officer Darren Entwistle speaking at their annual shareholders meeting in Toronto, May 5, 2011. REUTERS/Mark Blinch