Bell Canada Reveals Massive Cut in Job and Capex Amidst Financial Pressures

Bell Canada has revealed its decision to slash 4,800 jobs. The media and telecom giant cited declining revenues and what it termed as “unsupportive” government and regulatory decisions as the primary drivers behind the restructuring effort, marking its most extensive downsizing initiative in approximately three decades.
Bell Canada billingThe decision comes as Bell grapples with a shifting landscape in both its traditional and regulatory environments. Last year, the company had already revealed plans to eliminate 1,300 positions as revenue streams from legacy operations continued to dwindle.

Mirko Bibic, CEO of Bell, in its earnings report, has lamented the regulatory challenges faced by the company, particularly criticizing the federal government’s failure to address the competitive imbalance posed by global tech giants. He pointed to a decision by the Canadian Radio-television and Telecommunications Commission (CRTC) mandating Bell to open its infrastructure to competitors for selling internet services as particularly problematic.

The CRTC, in its decision last November, highlighted a decrease in competition among high-speed internet providers.

In response, Bell announced a reduction of capital spending by $1 billion in 2024-25, including $500 million in 2024.

Bell will roll back fibre network expansion as a result of federal government policies and the CRTC’s wholesale access rate decision that discourages network investment. Bell will also cap fibre speeds at three-gigabits per second.

In Q4 2023, Bell reduced its capital investment by $105 million more than originally planned.

While Bell’s operating revenue saw a modest increase of 0.5 percent to C$6.47 billion in the fourth quarter, its profit for the quarter ending December plummeted by 23.3 percent to C$435 million.

In 2023, its revenue rose 2.1 percent to C$24,673 million from C$24,174 million.

Mirko Bibic attributed these financial challenges to declining advertising revenue and losses in the news operations segment.

The announcement of job cuts drew sharp criticism from various quarters, with Canadian Heritage Minister Pascale St-Onge expressing disappointment and labeling it as “a dark day” for those affected. Pascale St-Onge emphasized the importance of corporate responsibility amidst changing regulatory landscapes.

Meanwhile, British Columbia Premier David Eby condemned Bell and similar entities, labeling them as “corporate vampires” for their alleged role in the deterioration of local news and the loss of journalist jobs.

The regulatory landscape in Canada has been evolving, with the introduction of the Online News Act aimed at addressing concerns raised by the media industry regarding the dominance of tech giants like Google and Meta Platforms (formerly Facebook) in the online advertising market. The Act led to a deal with Google to pay C$100 million annually to Canadian news publishers, while Facebook opted to block news-sharing on its platforms in the country.

Additionally, Bell unveiled a partnership with Best Buy Canada to re-brand 165 of its consumer electronics stores as “Best Buy Express,” with Bell serving as the exclusive telecommunications provider.

Despite the challenges, Bell maintained its position as a leader among national telecom service providers, as indicated by its continued reduction in consumer complaints and its successful acquisition of 5G+ spectrum licenses in recent federal auctions.

Baburajan Kizhakedath