- Optus cuts 200 jobs, closes 36 stores as Virgin Mobile brand is phased out
- By David Aidone
- Contributed by: Emma_S ( 2 articles in 2018 )
OPTUS is slashing about 200 jobs nationwide as it pulls the plug on its Virgin Mobile brand.
The telco says it will phase out the brand, which it has owned or co-owned for 18 years, over the next two years.
The news comes after the telco was hit with a $1.5 million fine today, after pressuring customers to move to the National Broadband Network sooner than required.
It is understood the telco will close about 36 Virgin Mobile stores and cut about 200 positions, and aim to move all Virgin Mobile customers onto Optus.
Optus is believed to have been in talks with affected retail and corporate staff today, and it is understood the telco is looking at whether some staff can be reassigned to Optus stores.
MORE: Optus ‘threatened to cut off 20,000 NBN customers early’
“For Virgin Mobile employees, our policy is always to talk to those who may be impacted by these changes first,” an Optus spokesperson said today. “Any potential options for redeployment within the wider Optus business will be discussed with affected individuals at that time.”
The company said Virgin Mobile customers will be contacted by Optus in coming days about the changes and their options.
Virgin Mobile Australia was established as a 50-50 joint venture between Optus and Virgin Mobile UK in 2000, before Virgin Mobile UK increased its stake to just under 75 per cent in 2002.
Optus, which was bought by Singapore Telecommunications in 2001, then purchased its partner’s stake in 2006 for $30 million, in a 15-year deal that allowed Optus to market a wider range of products under the brand, including fixed line and internet.
Earlier today, Optus was delivered a $1.5 million fine by the Federal Court after the Australian Competition and Consumer Commission launched legal action in December last year.
The court found Optus told about 14,000 customers that their services would be disconnected if they did not move to the NBN, in as little as 30 days in some instances.
There were also cases where the telco deceived customers by telling them they had to sign up to Optus’ NBN services, when they could have chosen any internet service provider.
It was found Optus reaped about $750,000 from the misleading activity, which lasted from October 2015 to March 2017.
ACCC Chairman Rod Sims condemned the deceitful act.
“Businesses should not make false representations which distort customers’ decision making. This is particularly important when many Australians are moving to the NBN for the first time,” Mr Sims said.
“It is illegal for businesses to mislead their customers and create a false impression through their communications. Today’s penalty serves as a warning to all businesses that such behaviour will be met with ACCC action.”
An Optus spokesperson acknowledged that some customers were disconnected before they migrated to the NBN, while others were given insufficient notice of their options.
“Optus has written to affected customers apologising for this error and offering compensation to customers that had been disconnected without sufficient notice,” the spokesperson said.
“Optus has acknowledged this was wrong and should not have occurred.”
Since the ACCC investigation commenced, Optus has paid $833,000 in compensation to affected customers for the disconnection of their services.
Last year, Optus was forced to compensate more than 8700 customers after charging them for download speeds they could not receive over the NBN.
Customers connected to its “Boost Max” plan that offered speeds of 100 megabits-per-second could only receive half that speed, while some users on Optus’ 50 megabit-per-second plan were found to have clocked half that speed or less.
At the time, Mr Sims said the telco’s behaviour was shocking because customers were being charged two speed tiers above what their connection could deliver.
“This is very bad behaviour by the retailers. They should have been warning their customers. They, more importantly, should have been checking and working out whether they were selling something ... they couldn’t deliver,” Mr Sims said.
Originally published as Optus cuts 200 jobs as Virgin brand axed