Rogers Feels The Pinch, Cuts 375 Jobs

by Gaurav Kheterpal on June 27, 2012

The alarm bells started ringing at Rogers last month as Canada’s largest communication company reported disappointing quarterly results. Rogers reported that its latest quarterly profit dropped by 16 percent as rising competition hurt its cable and wireless divisions. The company fell well short of analyst expectations.

In a strategic move to cut costs, the company closed its video rental business and laid off almost 300 employees in March. More job losses were expected as Rogers hinted at the possibility of trimming its professional services and outsourcing some of its IT work.

Rogers yesterday announced that it will eliminate 375 jobs across a variety of skills and including some management and sales positions. The cuts were effective immediately.

IMO, the worrying part for Rogers is that it hasn’t been able to translate the new dots on the LTE coverage map into actual revenue. Though it leads the pack as far as LTE coverage is concerned, the overall performance of Rogers wireless division remains a cause for concern. The company is also facing stiff competition in the cable segment, especially from Bell after the latter rolled out its IPTV service – Fibe in Montreal and Toronto. Rogers lost 27,000 customers last quarter, while Bell added 18,000.

“This was a very difficult decision,” company spokeswoman Patricia Trott said in a statement. “This is part of a comprehensive approach to cost management that we announced earlier this year. Going forward, we’re managing costs where it makes sense but we’re continuing to invest in driving the business forward and obviously we have a focus as well on driving revenue, new sources of revenue.”

In the recent past, Rogers has tried its hand at unconventional business lines such as machine-to-machine (M2M) wireless connectivitybanking and home monitoring service, but the revenue from these streams has failed to offset the losses incurred in wireless and cable segments. In a bid to boost revenues, Rogers is now betting big on M2M (machine to machine) technology. The company predicts M2M would be a C$400 million ($384 million) market in Canada by 2015 and it’s leaving no stone unturned to gain an early-mover advantage in this lucrative segment.

Analysts believe there’s no doubt that Rogers is feeling the heat of competition and the job cuts are an indication that the company’s management is desperate to maintain its profit margins. Rogers employs about 30,000 people across Canada.

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Written by: Gaurav Kheterpal. Follow TheTelecomBlog.comby:RSS,TwitterFacebook, or YouTube.

{ 2 trackbacks }

Rogers Quarterly Revenue Improves, Wireless A Mixed Bag —
August 21, 2012 at 6:07 am
Rogers LTE Goes Live In Moncton, NB —
August 22, 2012 at 1:43 pm

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