NZ Telecom's private owners slash jobs

Issue 

By Steve Painter

New Zealand's Telecom Corporation, sold by the government to two United States companies in late 1990, has announced plans to cut its work force by 5200 over the next four years.

The cuts were announced as the company declared a record profit of NZ$121 million for the December quarter of 1992, and is heading for a profit in excess of NZ$400 million for the 1992-93 financial year.

The latest cuts will leave the organisation with a work force of around 7500, down from around 18,000 at privatisation. NZ Telecom's work force has declined from around 26,000 in 1987, a cut of 18,000, including the latest cuts, in just over five years.

The cuts take place amid deep economic gloom, with 10% of workers officially unemployed and another 15% classed as "jobless" — a statistical euphemism to avoid including discouraged job-seekers among the officially unemployed.

NZ Communication and Energy Workers Union official Malcolm Blair says that, while some of the earlier Telecom cuts were probably unavoidable because of technological change, the latest round is "just about profits".

The cuts focus on a plan to centralise NZ Telecom's four existing regional organisations into one. Blair likens this to basing one organisation in Sydney to deal with telecommunications services and faults for the whole of Australia's eastern states.

The two US companies that now control NZ Telecom are Bell Atlantic and Ameritech. They still hold around 60% of shares in the organisation, despite an agreement with the government that they would sell a majority back to NZ interests. They have been given an extension until September 1994 to achieve this.

Even if they do eventually sell more than 50% of the shares, the US companies will remain in control of NZ Telecom, being the largest shareholders and dominating the management.

The US companies' failure to find New Zealand buyers with sufficient capital augurs ill for the Australian Liberal Party's plan to sell off Australian Telecom. As it is very unlikely that Australian interests could raise the $15-$20 billion to buy

Telecom, the organisation would probably fall into the hands of the North American telecommunications giants, which have delivered the USA one of the most confusing, least efficient telephone systems in the world.

Already, New Zealanders have had a taste of Americanisation, as some 130 mainly small companies now vie for business formerly carried out by Telecom, mainly in the fields of installation and maintenance.

Two other major companies, Clear Communications and Bell South, are trying to enter the NZ telecommunications market, but are having to fight legal actions at every step as the private NZ Telecom seeks to retain as much as it can of the old state monopoly.

Meanwhile, having squeezed the New Zealand lemon, NZ Telecom is seeking higher rates of profit elsewhere. It recently opened a permanent office in Indonesia, and is already heavily involved in Western Samoa and the Cook Islands. It is also believed to be seeking contracts in Australia as the NSW and Queensland governments move to set up their own state telecommunications systems.

More ominously, NZ Telecom has also begun tendering for New Zealand public service information services and registers, a move likely to create serious problems of confidentiality and citizens' rights to privacy.