A quarter of Allstream workforce to go

Canada’s Manitoba Telecom Services (MTS) said last week that it will cut a quarter of the workforce at its national carrier and business telecoms division, Allstream, whilst also reducing CAPEX and slashing its annual dividend, following a strategic review. As reported by Reuters, low interest rates and a spiralling defined-benefit pension bill have exacerbated the financial pressure of tough competition for the Manitoban telco, causing it to take action including cutting CAPEX at Allstream by 20%-30%, while 400 staff have received working notice and will exit the business in 2015-16, on top of 100 Allstream employees who have already left. The company has pre-funded CAD120 million (USD99.1 million) into its pension plan using existing credit facilities, a one-time move which it expects to eliminate the need for solvency payments for 2015-16.