Commander orders middle management cull

Troubled telco Commander has cut 600 staff and aims to slash its operational costs as part of its turnaround plan released yesterday by new CEO Amanda Lacaze.

"We've taken a good look at the areas which are most profitable and add value to the business, and we've targeted those areas that aren't for the reductions," said Lacaze, who formally took up the role as CEO and managing director of the telco in the first week of January.

The turnaround plan states that many of the job cuts will be coming from middle management, while "other reductions will primarily come from the IT hardware group and supporting functional areas".

"I am saddened that it has been necessary that so many staff leave the business but in taking this action I believe we are setting a robust platform for the remaining staff and further growth," she said in a statement yesterday.

When asked if the company had canvassed any options that involved retaining the staff, Lacaze told ZDNet.com.au today that it was "not relevant" and that the company was changing its business focus.

"The strategic review confirmed my view that the core value drivers in Commander's business are sound. However, some areas of the business are underperforming or are simply unprofitable. By taking decisive action today, I am confident we can maximise value for both customers and shareholders," she said.

According to its turnaround plan, the company expects to have positive cash flow from January excluding the costs associated with restructuring, and it has also made arrangements with its banking syndicate to defer over AU$120 million in debt repayments until October 2009, a year after the original deadline.

Lacaze took the helm of the telco after a year in which the board had to fend off repeated allegations of a proposed fire sale and in which its share price dropped significantly.