Spark has confirmed it is close to another major outsourcing deal affecting its networking and operations team.
Spark has confirmed it is close to another major outsourcing deal - this time affecting its networking and operations team - but won‘t confirm the number of roles that will go.
A source told the Herald a deal with Nokia could result in 200 jobs going from Spark, “replaced by workers in India and AI”, leaving just 14 in-house roles in the division.
But a Spark spokeswoman said the telco could not name the partner or disclose further details “as we have not finalised the agreement”.
LATEST: Spark confirms outsourcing deal with Nokia: The number of jobs that will be lost
She added: “The figures you have been given are incorrect in terms of overall role reductions, the quantity of remaining positions at Spark, and the quantity of onshore roles vs offshore.”
The Herald understands the number of in-house roles affected is close to the tipster’s total.
The number who will move across to the new partner is less clear.
Spark says it will be a “substantial” percentage of those affected.
“At our half-year result [reported on February 2], we announced that we had a heads of agreement signed to explore a network operations partnership to accelerate AI and automation, deliver greater efficiency, and enable access to global capability and innovation,” the Spark spokeswoman said.
“We have recently completed a consultation with our network and operations teams about this proposed change.
“While the proposal would result in an overall headcount reduction within Spark’s network and operations teams, there will also be opportunities for our people leaving Spark to transfer to similar roles within local operations being set up by our partner.
“As an agreement has not yet been finalised we can‘t provide any additional details, but will update the market and our people once this partnership agreement has been signed.”
Separate from Infosys deal
In April, Spark announced an expanded contract with Indian outsourcing giant Infosys. The spokeswoman said the latest contract was with a different party.
Nokia - which could not be immediately reached for comment - has been Spark’s primary mobile network partner since 2019.
The telco switched to the Finnish telecommunications infrastructure company for its 5G upgrade after the GCSB blocked a plan to go with its incumbent, China’s Huawei.
Nokia has “global delivery centres” in the Indian cities of Chennai and Noida, which deliver a portfolio of services to key customers globally.
Drive to save $50m in labour costs
Spark did not detail the net reduction of roles with its Infosys deal, which was aimed at reducing its IT operating costs - or if the staff who moved across to Infosys would be offered equivalent salary and conditions, citing privacy.
“We have worked with our partner to ensure that the remuneration of roles that have been created through this partnership are market competitive,” the Spark spokeswoman said.
Infosys, like its peers, has operations in India plus New Zealand and other countries where it runs its outsourcing operation.
Spark is on a drive, previously flagged to the market, to save $80-$100 million in labour and operating costs in its 2025 financial year, ending June 30 - including $50m from cutting around 10% of its workforce, implying around 500 layoffs.
While Spark has not released any financials around its new Infosys contract (or other deals with Microsoft and HP Enterprises), Forsyth Barr analyst Aaron Ibbotson told the Herald: “With this deal in particular, there will be some meaningful staff reductions.”
He added: “What Spark is trying to do is clearly painful for some employees. But they have to introduce a degree of flexibility into their cost structure so when the cost demand picks up, they can scale their partnerships. And when demand falls, they can reduce capacity without having to layoff staff.”
Ibbotson and other analysts criticised Spark for what they saw as only limited progress toward its cost-cutting targets in the first half of its 2025 financial year. The telco said it would pick up the pace in the second half.
Below: Prime Minister Christopher Luxon visits Infosys rival Tata’s Mumbai campus during his March trade mission to India:
Spark shares at $2.20 in early afternoon trading. The stock is down 47.9% over the past year, which has seen a series of earnings and dividend downgrades.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.