In the course of a year TPG cut 280 jobs, reducing its headcount by almost 6 per cent.
In its annual report, released today, the telco said that as of the end of July 2019 it had 4776 employees, down from 5056 a year earlier.
TPG said it had cut its employment costs for its consumer division $11.6 million in FY19, dropping from 7.7 per cent to 7.1 per cent of revenue. In its corporate division, employment costs decreased from 14.4 per cent of revenue to 13.3 per cent – a reduction of $7.7 million during the year.
“This reduction in employment costs principally reflects ongoing efficiencies that have been achieved through the continued integration of iiNet operations and increased automation of business processes,” the document states.
In a letter to shareholders included in the annual report, TPG chair David Teoh acknowledged that FY19 had been a “difficult year” for the group, citing two key regulatory decisions.
One was the decision by the Australian government to ban the use, ostensibly on national security grounds, of equipment from Chinese company Huawei in 5G networks. In the wake of the announcement TPG ended its rollout of a 4G network based on Huawei gear, citing the lack of an affordable upgrade path to 5G in the wake of the ban.
The other decision was the Australian Competition and Consumer Commission’s opposition to a merger between TPG and Vodafone Hutchison Australia (VHA). TPG’s plan to become Australia’s fourth mobile operator, including buying up extensive spectrum licences and beginning to deploy small cells in major CBDs, was a key factor in the ACCC’s decision. The competition regulator argues that the emergence of a fourth mobile network operator would be a significant boon to Australian consumers.
“Given our firm belief that the proposed merger would greatly enhance competition in the Australian telecommunications industry, the merger parties launched proceedings in the Federal Court seeking orders that the proposed merger will not, and is not likely to, substantially lessen competition,” Teoh wrote in his letter.
“The proceedings were heard in September and the judge expects to deliver his judgment by February 2020. We remain hopeful that the merger will be permitted to proceed.”
“Over the past couple of years, a huge amount of time, resource and shareholder funds has been invested in our Australian mobile project and in the merger transaction,” the letter adds.
“In relation to the mobile project, we believe that the mobile sites that we had installed prior to ceasing the rollout would be complementary to the VHA network and they, and the spectrum licences that we hold, are undoubtedly valuable assets.”
Last month, TPG revealed its profit for the year had plummeted 56 per cent. Revenue was flat, while EBITDA was down 2.1 per cent to $809 million.