A major tech overhaul at Three UK will result in a raft of job cuts for the telecom firm’s 4,500-strong workforce following the roll-out of a new platform next year.
Three UK chief executive Dave Dyson told the Press Association that the number of staff would inevitably shrink as updated tech infrastructure results in further automation and demand for skills that current employees may not have.
He said the company had “not said anything” yet regarding the number of jobs potentially at risk, but that the total tally of “back office, head office-type staff” was “more likely to go down than go up”.
Three UK, which is ultimately owned by Hong Kong’s CK Hutchison Holdings, currently employs around 2,000 head and back office staff, and a further 2,500 in its 330 retail stores across the country.
Mr Dyson stressed that the job cuts would be gradual over the next few years.
“The new technology will start to be introduced to our customers around the middle of next year … but again it will be another three years before we fully switch off all of our legacy technology, so it’s not like it’s going to happen overnight.
“But I think as a general rule of thumb – not just in our industry but in most industries – technology and automation will have a big impact on the workforce.”
Mark Newman, chief analyst at telecoms industry association TM Forum, said the UK telecoms industry could end up axing tens of thousands of jobs.
“In the UK, the top mobile and fixed-line operators collectively employ about 120,000 people.
“Based on our research, more than half of operators estimate that between 20% and 40% of people in their organisation are in roles that will not be needed in a decade.
“That means over the next 10 years between 24,000 and 48,000 roles could be lost in the UK alone.”
Three UK expects its new platform to dramatically speed up customer service and help the firm keep up with cutting-edge technology.
While it may take about half an hour to sign up to a new service at one of Three UK’s retail outlets, the new technology could cut that process down to five minutes, leaving more time to speak to staff about new features and products, the chief executive said.
“We’ve taken a decision to completely replace all of our IT technology that will have a huge impact in terms of the experience our customers will have,” Mr Dyson said.
He added that the move posed less risk than bolting on improvements to the older system.
“When you start to change individual components, you still have to plumb them into the old components and that’s where a lot of problems happen. We’re starting greenfield – it’s all going to be done from scratch.”
Recent overhauls have not been as lucky.
High street bank TSB is still trying to recover from the failed migration of customer data, which it tried to move from former owner Lloyds Banking Group’s IT system to a new one managed by current owner Sabadell in April.
It left up to 1.9 million people using TSB’s digital and mobile banking locked out of their bank accounts.
While the telecoms and banking sectors are worlds apart, important lessons could be learned from other firms’ failings.
“I think what TSB then did is they tried to move people too quickly on to the new system,” Mr Dyson said.
But he said Three UK would be moving its near 10,000 customers over in phases.
“We’ll test it properly and then we’ll load it in in an appropriate way … we’ll be doing it over at least a year and we’ll do it in phases. So we’ll start with certain segments of our customer base first and then we’ll broaden it out.
Three UK expects to be the first among its peers to overhaul its platform, and, while the costs of building out the new platform have weighed on profitability, Mr Dyson said it will ultimately help cut costs.
“As a telecom industry, if we don’t move, someone else will come in and steal our business. So I think we’re moving first but I think there’s risk that we need to manage, I think it’s going to be a big advantage.”