2degrees reviews costs, projects and staffing levels in response to COVID-19

Telecommunications provider 2degrees today provided a business update amidst the evolving coronavirus (COVID-19) situation and its impacts on the economy and its business.

2degrees Chief Executive Mark Aue said that the company is an essential service provider and more important than ever to customers, but it is not immune from the financial impacts of the crisis.

“The New Zealand economy is being impacted in unprecedented ways by COVID-19,” says Mr Aue.

“We are a resilient business and will continue to invest in our mobile and broadband networks, and ensure our customers are well served by our New Zealand-based care team. We owe it to our customers and staff to ensure we weather this storm, so we’re making some difficult decisions now to avoid bigger changes later.”

2degrees has briefed its people today on a range of cost reductions taken to respond to the impact of COVID-19, advising that whilst agreed measures go a long way, unfortunately more will be required through staffing changes.

The company’s response measures include a reduction in capital spend and deferral of non-essential projects, reduced operating costs including a recruitment freeze, renegotiation of supplier rates and vendor costs and an acceleration of cost savings initiatives from 2021. In addition, the company has proposed staff changes that would see a 10% reduction in the company’s 1200-person workforce.

Mr Aue says that although 2degrees’ people are its biggest asset, “the harsh reality is that we must now take decisive action, reducing staff numbers or the hours worked for some roles”.

“We are already seeing revenue impacts, and like all businesses, are in an unprecedented situation with uncertainty on how long it will last,” says Mr Aue. “We’re starting those difficult discussions with our people now and out of respect for them won’t be providing more detail until we’ve had time to fully consider their feedback.”