Sensis has carried out another round of redundancies, offering further evidence of mounting financial pressure as the company tries to offset terminal decline in its Yellow Pages print directories with digital sales.
Telstra’s troubled advertising and directories division axed 23 positions yesterday but it is understood that number is likely to grow. Its national sales director, Angela Buckley, also left last month.
Sensis spokesman Damian Glass said the cuts were a mix of middle management and back-office support roles.
“These decisions are very difficult but are consistent to the commitments we have made previously,” he said. “We will constantly review operations to ensure we have the right resources in the right areas, so we can operate competitively and meet our customer needs.”
In March, chief executive Bruce Akhurst announced a long-awaited overhaul of the Sensis business focused on digital services.
Investors and analysts had been waiting for the move because a growing number of customers were ditching its highly profitable directory listings as consumers increasingly searched for business information online.
The digital offerings being pitched by Sensis help customers improve the effectiveness of online advertising through mobile gadgets such as smartphones and tablets. They make use of social media tools such as Facebook and Twitter, as well as building and managing websites, and providing detailed monthly reports of service performance.
Mr Akhurst used Telstra’s full-year earnings presentation in August to warn that it would be another three years before digital could offset print decline.
Credit Suisse analyst Brad Clibborn told The Australian Financial Review on Wednesday that revenue pressures
meant costs had to be taken out of the business.
However, he suggested the company’s three-year revenue replacement target was “challenging” because the online world was more competitive and that made it difficult to generate the same revenue per customer.
“If you look at any business that has moved online, whether music or advertising and media, traditionally there has been pressure on revenue and price,” he said.
Sensis, which with fixed-line phones has been one of Telstra’s highest margin businesses, cut 120 jobs earlier this year after suffering the biggest fall yet in Yellow Pages sales.
Mr Clibborn said the number of small businesses that were yet to move online created short-term opportunity for Sensis to help customers enter the digital world, but expressed concerns that those same customers could eventually cut out the middle man.
“Once these small businesses become comfortable with the internet and start exploring different options themselves, that’s when the risk emerges for Sensis,” he said.
Brian Corrigan – 18 November 2011
afr.com/business/technology/sensis_wields_jobs_axe_again
The 3 or 4 remaining Sensis employees are going to find it tough to deliver all that kindling to their reluctant customers.
Sensis still thinks it’s 1988… it’s actually quite funny.