(Adds details on plan, comment, share price)
* Telecom to cut over 1,000 jobs
* Restructuring costs NZ$70-NZ$80 mln
* Costs reduced by up to NZ$110 mln annualised
WELLINGTON, March 28 Telecom Corp said
it will slash around 16 percent of its workforce to reduce costs
by up to NZ$110 million ($92 million), the country's biggest
telecommunications group said on Thursday, warning of more to
come as it restructures its ailing businesses.
Telecom said it expected to cut full-time employees to 6,300
to 6,600 by mid-year, from 7,530 at the end of 2012, as the firm
struggles to compete in the broadband market.
"This is an important step to build a leaner, more agile
organisation with a competitive cost structure, setting us up to
win in the market," Telecom Chief Executive Simon Moutter said
in a statement.
The restructuring, which also includes the Australian
operations of its Gen-i unit, would incur a one-off cost of
NZ$70 million to NZ$80 million in the current fiscal year.
Telecom said this initial exercise would cut its payroll
costs by NZ$90 million to NZ$110 million on an annualised basis,
pointing to more redundancy in the pipeline.
The phone operator said it is working through the remainder
of its strategic change process, with further job cuts and other
one-off costs expected.
"Telecom will provide a second update once decisions are
taken," the company said.
The move was expected, as Telecom competes in the broadband
market with Vodafone, which bought TelstraClear's
operations last year.
Telecom shares were up 0.2 percent at NZ$2.325, compared
with a 0.3 percent dip in the broader market.
It retained its adjusted earnings before interest, tax,
depreciation and amortisation guidance of NZ$1.04
billion-NZ$1.06 billion for the year, excluding the
($1 = 1.1964 New Zealand dollars)
(Reporting by Naomi Tajitsu; Editing by Bernard Orr)