Starhub has announced that it will be effecting a reduction of ~300 primarily non-customer facing full time employees following its strategic review process.

The group also noted that additional roles will be made redundant, with on-going natural attrition and tighter management of contractor roles.

A one-off restructuring cost of ~S$25m will be incurred, though provisions have already been made over the course of 2016 and 2017.

For the first time, the group highlighted that the broader strategic transformation programme is expected to realise S$210m in savings over a 3-year period from 2019.

However, net savings will be lower as the group will be redirecting resources to fund growth opportunities.

We believe that the market has been expecting a similar announcement. We maintain our estimates, HOLD rating and FV of S$1.65 for now.

Source: OCBC Research - 4 Oct 2018