Telus releases its layoff-authorizing board resolution publicly

In order to continue paying dividends to the company's shareholders — including its employees who collectively are its fourth largest shareholder — Telus Corp. would have to lay off large numbers of employees if the CRTC moved to mandate access for mobile virtual network operators, according to a February board resolution filed with the CRTC and released Monday. Because of the Liberal government's promise of a 25 per cent price reduction in wireless prices and the possibility of mandated MVNO access, the company "would be forced to find reductions in free cash flow of up to $1.1 billion in cash savings," the resolution reads. Telus would make the cuts, the resolution reads, "to continue paying dividends in accordance with its dividend growth policy to millions of Canadians who hold the Company’s shares, including the Company’s employees who collectively make team members the Company’s fourth largest shareholder." Darren Entwistle told regulators at the CRTC wireless hearings in February that if they decided to mandate MVNO access, his board had authorized "in the zip code of" 5,000 layoffs from the company, as well as cuts to investment. “There’s been a lot of conjecture related to disinvestment or reduced investment,” Entwistle told commissioners in February. “There are some views that this is just theater perpetrated by the incumbents, and that if mandated MVNOs come to fruition, or if there’s an enforced second tier 25-per-cent reduction, we will go on with status quo investing,” he said. The board's resolution makes no mention of the concrete number of layoffs, but instead authorizes "material reductions in capital and operational expenditures" and "material reductions in employment and third party expenditures to reduce cash requirements" over three years. It is unclear where the 5,000 number came from, but the resolution authorizes "free cash flow savings sufficient to address the free cash flow reductions modeled by . The resolution also authorizes "such plan reserving flexibility on the part of management to determine the optimal mix of cash outflow reductions and margin stimulation activities." Telus did not respond to questions for clarification by deadline Monday. After being told it had to either publicly release the board's resolution or else withdraw it from its submissions, Telus opted to release it. In addition to authorizing some level of layoffs, the resolution says any cost-saving program could involve "reducing or eliminating investments in fibre in Tier 2 and 3 Alberta and British Columbia communities, scaling back or slowing 5G network rollout plans, reducing or eliminating retail operations in smaller communities." Telus is not the only company to threaten cuts in response to regulatory moves in the last year. BCE Inc. CEO Mirko Bibic told commissioners at the same February public hearings that the industry would reduce investment by some $500 million a year, should the regulator approve mandated MVNO access. Quebecor Inc. threatened legal action, and Rogers Communications Inc. also promised investment cuts. CORRECTION: A previous version of this story incorrectly stated that Bell would reduce investment by $500 million.

Telus releases its layoff-authorizing board resolution publicly

Brief | June 29, 2020

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Telus releases its layoff-authorizing board resolution publicly

Brief | June 29, 2020

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