Telstra restructuring troubled Kaz group, no buyers in sight

Telstra is restructuring its troubled ICT services arm Kaz by combining parts of its NSW and Victorian businesses, and moving more services into Telstra.

KAZ Group managing director Mike Foster announced the merger in an internal memo obtained by The Australian.

Foster told employees: “To enable us to have a consistent presence across all states in line with market demands, it is imperative that we now structure NSW and Vic to effectively leverage our sales, delivery and new solutions.”

As well, starting 1 October, Kaz’s shared services teams -– human resources, legal, finance, group IT and procurement -– will be moved into Telstra’s enterprise and government divisions.

Said Foster: “The shared services team members who partner with our business today will remain focused on Kaz and continue to provide you with the great support you receive today.”

The merger will see the departure of commercial and government general manager Chris Munro. Munro’s exit follows the departure of KAZ Group’s financial manager Ashley Clarkson, who left just weeks ago to join rival S Central.

KAZ Group is the largest Australian-owned information technology company, employing approximately 1500 people across Australia and south-east Asia.

Telstra bought the KAZ Group for $333 million in April 2004. Since then, Telstra has sold parts of Kaz’s business, and incorporated others into Telstra. Hundreds of employees have been moved from Kaz into Telstra.

Telstra has made unsuccessful attempts to sell the company to Fujitsu Australia and CSC. A Telstra spokesperson has confirmed that there are no prospective buyers at this time.