Pure massacre: Optus sacks 750


news The nation’s number two telco Optus this morning revealed plans to sack some 750 staff, in a company-wide restructure which it claimed was aimed at giving customers “a stronger voice”.

In a statement, the company said it would create a “customer division” responsible for managing all aspects of the company’s relationship with its customers throughout the lifetime of their service. This restructure would be supported by the creation of “new marketing and sales division” to support its Optus brand, alongside the centralisation of a number of other key functions, including “commercial, human resources and strategy”.

The telco said the restructure would also see it rationalise “a number of operational, back office and administrative functions” to help drive greater efficiencies. “By moving to a more streamlined and centralised structure, Optus will remove a number of areas of duplication,” the company said. “As a result, Optus is proposing to make approximately 750 roles redundant over the coming months, with an associated one-off charge of approximately $37 million. The majority of these roles will come from senior and middle management as well as operations, back office and support functions.”

The company said that in order to maintain its “customer focus”, minimal customer-facing staff would be directly affected by the announcement.

The company’s chief executive of its consumer division in Australia, Kevin Russell, who has only been in his role effectively overseeing Optus in Australia for several months, said the “competitive environment” required Optus to have “a sustainable cost structure” that would allow it to remain competitive and continue to deliver value to its customers.

“However, a key driver of the restructure has been to elevate the voice of our ten million customers to ensure they are heard loud and clear in every aspect of our business,” he said, “in our service delivery and support, in the products and services we bring to market, and in the consistent experience we provide across all our sales channels.”

“By creating a more efficient organisation with a renewed focus on the customer, we will be able to compete more effectively,” Russell added. “When combined with our reinvigorated Optus brand and stronger mobile network, these changes will put us in an even stronger position to provide our customers with an exceptional and rewarding experience, while at the same time driving sustainable growth for our business.”

The news comes as Optus continues to experience only modest levels of growth in both its customers and key financial measures. In February the company reported a net profit of A$177 million for the third quarter, representing growth of 4 percent. The company’s operating revenue was up 2 percent to A$2.42 billion, while EBITDA increased 2 percent to A$562 million. The company added a mere 182,000 mobile customers in the quarter, and experienced negligible fixed-line growth.

In comparison, Telstra bolted on some 958,000 new mobile and fixed customers to its roster over the second half of 2011.

Rather than analysing the current situation, I’ll re-post my thoughts here that I wrote after Telstra revealed its latest set of financial results in January:

“Optus chief executive Paul O’Sullivan has a huge amount to answer for here.

Right now, Optus is experiencing growth of something like one (possibly two or three, with the Christmas period?) percent growth in its mobile division. Telstra is experiencing ten. Telstra just bolted on almost a million new Australian mobile customers in six months. In that period, Optus will struggle to bolt on a third that amount — and it might even look a lot more like a quarter.

Optus might call itself Australia’s leading telco challenger brand, but right now that’s nothing more than a bad joke. Telstra is the challenger brand in Australia’s mobile market — it’s challenging the status quo in terms of what we previously thought could be done in the mobile sector, and it’s blitzing Optus and driving Vodafone into the ground in the process.

This should be particularly disturbing for Optus.

As I’ve previously written, Optus has virtually ignored Australia’s fixed broadband market recently, resulting in its lunch being completely eaten over the past five years by the likes of TPG and iiNet, which now have stronger brands than it does in fixed telecommunications. It has done this in order to focus on the more profitable and unregulated mobile sector.

However, now Optus is having its lunch eaten in the mobile market as well. Telstra is making an absolute mockery of Optus in that segment. “Challenger telco”? I think not. Right now, in mobiles, Optus is virtually stuck in neutral.”

The fact that Optus this morning claimed it was restructuring “to give customers a stronger voice” is nothing more than a bald-faced misdirection. The company is experiencing negligible growth and is clearly going through a cost-cutting exercise designed to shore up its margins. It’s hard to argue that sacking 750 staff will give customers “a stronger voice”, when it seems clear that those customers will have less people to speak to.

I have a message for Optus. You don’t drive long-term growth by creating new marketing and sales divisions, while simultaneously cutting operations, back office and support staff. You drive growth by innovating and creating new products and services that your existing salespeople can sell. You know, the kind of thing which Optus used to do, and which iiNet and Telstra are doing right now.

Image credit: Promotional shot for AMC’s The Walking Dead TV series


  1. I was with them for about four years and never found their customer service that good, so I changed my Telco.

  2. I hate to see anybody retrenched, but I’d be hard pressed to sympathise if the following were targeted:

    – the people who strangle (not throttle) bits of the Internet every night at 6:00 PM Sydney Time, on the dot;

    – the people who refuse to get the mail server up to a satisfactory state of reliability;

    – the people who deleted the news server.

    Oh, and anybody connected with the decision to call the thing “Optus Zoo”.

  3. I’ve been with Telstra for over 3 years, and their customer service and billing are pathetic. I don’t know if this has been fixed up yet, but I’m with Optus now, and I’m one satisfied customer.

  4. I’ve been with Optus mobile for the past year. I joined on a 24-month contract to snag myself a Galaxy S at what was, at the time, a very reasonable price.

    As soon as my contract is up – or it’s affordable to pay it out – I’m moving to Telstra. Why? Two very simple reasons:

    (1) Appalling customer service. I won’t retell every negative story I’ve had, but the worst example in my experience was when someone in sales phoned me back after I requested a call about possibly getting a Home Zone (femtocell). I had read the conditions carefully online and found that some of the information the sales guy was feeding me about the fine print was totally wrong. Considering the legal implications of misrepresenting terms and conditions, that’s a pretty huge black mark, even if it wasn’t intentional.

    (2) Network congestion. It is seriously frustrating to consistently struggle to initiate a connection when you have full 3G reception in the CBD. I can only assume this is due to over-subscription, and to be honest, even Vodafone seem to be making a more genuine effort to address that sort of thing.

    It is remarkable spin to suggest that because these sackings will (mostly?) not affect the customer-facing staff, that Optus are therefore trying to make their business MORE customer focused. I doubt the call centres will be any more helpful when they have even less colleagues and resources to call on to fix the issues they are bombarded with.

  5. I used to be on the Optus network via Virgin. Never again. Huge blackspots in Tasmania, dropped calls galore, pathetically poor data performance and constant fall-backs to 2G in 3G areas.

    Telstra’s network was greatly superior when I first switched to it 18 months ago (and still is in terms of coverage in Tas) but lately its data performance has been almost as bad as Optus.

  6. Grt report Renai -Yes Optus has been a disaster over the last 2 yrs esp not making hay while Voda burned. Now with Voda back in top gear Optus will struggle with the existing management. My mind just can’t understand this crappy Zoo thing they talk of..,,??!!
    Gordon Ballantyne at Telstra has been a real find for Thodey and I credit him for his hands on personality style.

  7. Optus, QANTAS, Telstra, GM Motors, the big four banks. In the end, they’re all the same. They can do what they like and they know it. Our Government is gutless and blind.

  8. The problem with Optus is that frankly, their plans are over priced for what they are. As an example, I’ll pull 2 plans, one from TPG who uses Optus as a wholesaler (so quality of calls etc are the same regardless) and the equivalent from Optus themselves. The 2 plans are TPG’s $18 a month Super Value Medium Plan, and Optus’ $34 a month BYO plan. These plans as you both have to have a mobile phone already (or buy one), both have 1.5GB data, both have the same ‘included’ value and effectively near the same prices for calls, SMSs, etc. But for the life of me, I can’t work out why Optus costs $16 a month more for effectively the exact same plan. I could understand a bit more for Optus’ own customer service but at that difference, is it actually worth it?

    And to be honest, took a look at Optus’ plans which include mobiles, they’re not much better. iPhone 4S 32GB is going to cost you at least $67 on a $49 ‘cap’ plan with the exact same features as their $34 BYO plan. Looking at the Samsung Galaxy S II makes it apparent that Optus really needs to have a better uniform price structure between all mobile plans. $60 a month for the same features (except $100 more in plan value) as their $34 BYO plan. Looking at Telstra, you can see why Optus isn’t progressing, iPhone 4S 32GB with same features but included unlimited SMS will cost $74 a month on a ‘$59’ plan and for the Samsung Galaxy S II 4G (can’t get the standard phone at Telstra) at $64 a month.

    I only looked in terms of mobiles, but from what I can see, if you’re not wanting a new mobile, don’t go with Optus, if you’re wanting a new mobile, it’s probably not too much more to go with Telstra now. Optus has a lot of catching up to do it seems. I should also mention, the companies used were selected for example only and no other reason. I’m personally using a TPG sim on the $18 ($15 for me as I’m also a TPG ADSL Home Phone customer).

  9. Well I guess the telecom arm of the Singapore family dictatorship really doesn’t give a flying about down under… probably just a hedge fund for the junta anyway…

  10. Like every companie does, we got told of this “Big Restructure” and the spin that goes with it. It created so much uncertainty as we were actually told by senior management “we dont know who goes where at the moment”

    How can a company spend millions on restructuring and not know the gritty details? Leaving people on edge. A team near me was called into a meeting and told “your jobs are under review” You know somethings happening when there are faces on your floor that you havent seen before.

    Optus has offshored so much work recently, you have no idea. It was all a setup, hire the overseas workers, train them up (with help from the Australians) then send all of their work offshore.

    Yeah, Optus isnt the first to do so and wont be the last., but that doesnt mean we should all be happy about it. The purse strings have been tighter than you know what, ever since Singel paid way too much for Optus all those years ago.

  11. Front line are waiting for a tap on the shoulder, our jobs will go offshore so good luck with anyone who needs a real issue dealt with, if nothing getting resolved irritates you imagine how we feel when we have to fix up offshore errors daily..

  12. personally id recommend amaysim, they use optus network and their call center is in sydney

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