03 October 2018
Singapore, 3 October 2018 – StarHub announced today that as part of its strategic transformation plan, it will focus and continue to invest in new businesses such as the recently created cyber-security company (Ensign InfoSecurity), in digitalisation initiatives to transform customer experience and in industry-leading wireless and fibre services to deliver content and applications on any device to all consumers. The company will also accelerate investments in developing information and communications technology solutions and capabilities for enterprise customers.
Recognising the inevitable pressures from intense local competition and adverse industry trends, StarHub has also initiated an operational efficiency programme to improve productivity, improve speed in decision making and lower operating expenditure across the board. The strategic review process has also unfortunately resulted in the conclusion that a reduction of workforce is required.
Workforce reductions will primarily affect non-customer facing functions, with approximately 300 full time employees impacted. On-going natural attrition and tighter management of contractor roles will result in additional roles being made redundant. StarHub will start notifying employees as soon as practical (subject to compliance with statutory reporting and regulatory requirements) and no later than the end of October 2018.
“The intense competitive ferocity right across the market, new entrants, lower voice revenues, thinning margins for fixed broadband services, high content costs for Pay TV operations and high market penetration for mobile and fixed services, has necessitated efficiency optimisation initiatives as part of the strategic transformation plan,” stated StarHub’s CEO Mr Peter Kaliaropoulos (Peter K).
“Technological innovation and competition are redefining how we deliver services to our customers and we at StarHub need to transform our operating model, otherwise we will face greater risks in the future. Our revised operating structure will be best placed to meet our strategic intent, enhance customer experience, increase accountability and effectiveness and improve competitiveness and agility,” Mr Peter K added.
The overall strategic transformation programme, aimed to improve operational efficiencies and productivity, is expected to realise S$210 million in savings over a three-year period from 2019. In addition to workforce reduction, StarHub is targeting savings in procurement activities, leasing costs, rationalising spending in network and systems repairs and maintenance and overall sales and distribution expenses. As resources will be directed to fund growth opportunities, lower net savings will be realised.
A one-off restructuring cost approximately at S$25 million which includes funding to support outplacement, training and coaching will be incurred. Such cost will not have any impact on StarHub’s guidance for FY2018.
StarHub will work closely with its affiliated companies, the Singapore Industrial and Services Employees’ Union (SISEU), NTUC’s e2i (Employment and Employability Institute) and government agencies such as Workforce Singapore to identify suitable roles for impacted employees. Support will also be provided in terms of comprehensive career transition and outplacement counselling, including coaching and skills upgrading programmes.
“We wish to recognise the extensive contribution that our impacted employees have made to the company’s past development and growth. Such decisions are never taken lightly. I am very aware of the impact on all our employees, and we are making every effort to support those impacted through this challenging transition. The redundancies are not an individual performance issue but one of strategic realignment of StarHub. We have been extremely fortunate to have many competent people in our team but some positions are not sustainable given the current industry pressures,” Mr Peter K said.
"The strategic transformation review is aimed at simplifying our company structure, simplifying product offerings and customer touch points with the ultimate aim to be more agile, to deliver better customer experience and to drive sustainable growth. While reducing overall resources, StarHub will continue to grow its workforce in areas such as cyber security, home and enterprise solutions and customer care,” concluded Mr Peter K.