According to a presentation from Tabcorp managing director and CEO Adam Rytenskild, the transformation is one of six halves – and, if taking it one half at a time in the parlance of sporting cliches, the first step is to slim down. Tabcorp is looking to reduce a projected 2025 operating expense sheet of $700 million down to between $600 million and $620 million, with those eventual savings to be injected back into new growth measures to underpin TAB25.
Rytenskild said that the solid half-year results, which were above market expectations, were an indication that Tabcorp’s transformation strategy was on the right track, and that with the company now “unshackled” by its Lottery Corp demerger it could pursue a simpler and more agile operating model that delivered faster for customers.
The “financial headroom” created would be invested back into products, branding and potential investment opportunities.
The AFR reported that Boston Consulting Group had been hired to design the Genesis program, but it’s unclear from the reporting the extent of the engagement.
With the promise to reveal further TAB25 details at an investor meeting in May, the current Genesis outline is geared around six pillars, beginning with the establishment of a next-gen operating model and enabling agile and contemporary ways of working through to the optimisation of procurement, property and investments.
It’s across all six pillars where Tabcorp will look to carve out ongoing savings, and while there was no mention of any potential job cuts in the company’s half-year presentation, Tabcorp’s chief financial officer Dan Renshaw did make a somewhat ominous reference to wage overheads when reiterating that cost-cutting would occur across the board. “It’s not just one or two sections. We have call-outs across the six pillars. Our employment cost is around half of our total base.”
Since then, 130 workers have been given the flick. According to reports, those axed are spread across the business, including members of its marketing, tech, retail, legal and HR divisions, and makeup close to 5 per cent of Tabcorp’s roughly 3,000-strong staff.
The Sydney Morning Herald cited the opinion of multiple industry sources that the cuts were well overdue; “They have just added and added and added to their headcount and have failed to get results,” said one source.