February 17: Telecom announced a massive staff reduction programme yesterday, which will see numbers cut by more than 5200 in four years.
It unveiled the plan despite announcing a record third quarter profit of $121 million.
The cuts mean 3000 employees will leave by March 31 next year.
The aim is to have a staff of 7500 by March 1997. This compares with 26,000 at the time the New Zealand Post Office telephone department became an SOE in March 1987, and the current staff of 12,500.
The announcement of staff cuts follows a review of the company, which compared its performance with telecommunications companies overseas.
"When we applied international standards, it became clear that to compete effectively we must create a company with efficient nationwide systems capable of delivering flexible, responsive service to all our customers, the chairman, Mr Peter Shirtcliffe, said.
While regretting the redundancies, he said: "Sadly, the board believes there is no real choice. Either we take action now ... or we face a situation where our company's position is gradually eroded and its growth prospects diminished."
The Communications and Energy Workers Union said Telecom should have waited until it had more details before telling staff about redundancies.
Mr Gilbert Reid, a Dunedin organiser, said some jobs would go from March 31, but staff would not be told until Monday.
Staff throughout the country met management yesterday morning to be told the first 3000 jobs would go in the next 12 months, and another 1500 by March 1995. The final 500 will be cut by March 1997.
Telecom employs about 2400 in the South Island. There are 319 employees in Dunedin and another 92 throughout Otago.
From April 1, the four regional operating companies, Telecom Networks, Telecom Operations and the corporate office will merge a single unit, operating from Wellington.
A Telecom spokesman, Mr Chris Galloway, defended the company's decision to tell staff about the extent of redundancy without giving specific details.
"We wanted to give staff the broad picture as soon as we could, but details will have to wait." Management was still ironing out specifics and would consult the union. Details would be given to staff as they were available, he said.
Telecom estimated the redundancies would cost $350 million, after tax.
It stated that as a result of the restructuring, customers could look forward to "much faster, simpler dealings" with the company.
Reaction among staff in Dunedin was mixed, Mr Reid said. Some thought the announcement was a non-event and told them nothing they did not already know. For others it added to their fears.