TELUS lays off 1,000 to 3,000 workers, may close down Shaw wireless and internet businesses

Losses at troubled wireless firm TELUS are forcing the telecom giant to make major cuts to make the acquisition of its U.S. rival, Shaw Communications, work. TELUS will be forced to lay off employees…

TELUS lays off 1,000 to 3,000 workers, may close down Shaw wireless and internet businesses

Losses at troubled wireless firm TELUS are forcing the telecom giant to make major cuts to make the acquisition of its U.S. rival, Shaw Communications, work.

TELUS will be forced to lay off employees as it prepares to fold the wireless, internet and TV businesses of Shaw into its own, said Dvai Ghose, an analyst at Canaccord Genuity.

He predicts job cuts could amount to anywhere between 1,000 and 3,000 as TELUS aims to focus on cutting losses in the home business while expanding the wireless side of its business.

“TELUS is clearly cutting their teeth (at the merger) first,” Ghose told the Financial Post. “A lot of this was necessary, given the challenges of merging these businesses.”

Any job cuts in Rogers’ new $26-billion deal to acquire Shaw Communications will probably amount to between 150 and 300 and will mostly be head count reductions, according to industry sources. Rogers is continuing its review, which could take as long as six months, while Shaw recently said it would shut down its online streaming service.

A Rogers spokesman declined to comment.

“Shaw is currently going through integration planning and we are working closely with Shaw on that process,” said Joe Natale, president of TELUS. “We are looking forward to the announcement of the final impact on both organizations. We anticipate Shaw employees will recognize the importance of this merger, particularly for customers.”

Shaw went public with the plans to sell its TV, internet and wireless businesses on Wednesday after reaching a long-expected deal with Rogers to acquire all of the latter’s media assets for $1.3 billion.

The initial deal is a complementary acquisition in the face of Canadian and regional competitors Shaw, Cogeco and Corus Entertainment seeking to grow. Both Canadian and U.S. competitors, including AT&T and Charter Communications, have spent billions to buy assets in the English-speaking Canadian market, including Pro Media Network, Shaw’s TV assets. AT&T bought WestJet’s slots at Toronto’s Pearson International Airport, but has not yet made a deal with Indigo-controlled startup OpenSky, which could create congestion at the new airport terminal.

TELUS’s acquisition was Canada’s largest deal since Air Canada acquired domestic rival Jazz Air in 2015. Air Canada, WestJet, Telus and Shaw are all battling to counter the growing power of Amazon.com and other American online retailers.

While the Shaw deal moves Rogers deeper into the media sector, the biggest sale announced Wednesday by Rogers, in its 22nd consecutive year of acquisitions, would be its biggest to date.

Rogers plans to spend $5.1 billion to acquire Shaw’s media division and $700 million on SNC-Lavalin Group Inc. for engineering and construction in its bid to counter growing competition from BCE Inc. in broadcasting and Rogers’s media business. The bid will pay Shaw $2.4 billion in cash, $2.1 billion in debt and $700 million in new stock.

“We believe this is a turning point in our media strategy and the beginning of a brand-new era for Rogers,” said Nadir Mohamed, chief executive of Rogers Communications Inc. in a release.

Tom Mayenknecht, executive vice-president at Decide.com, an analysis platform, predicted Rogers will develop a better service with the TV and internet assets it acquired.

“There is more to come,” Mayenknecht said. “It’s a good move.”

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