Earlier this month, we reported on the downfall of iiNet’s Sydney office and the mass redundancy of staff. Since then, more former workers from the troubled ISP have reached out from other offices around Australia. The company has inevitably changed since it was acquired by TPG over a year ago and based on the testimonies from ex-iiNet staffers, the situation looks grim for all of the remaining local iiNet operations, including Internode.
From severe cost-cutting measures to inadequate resourcing, former iiNet employees have recounted changes that occurred after the TPG acquisition. In their opinion, these changes caused a decline in customer service and contributed to their decision to leave what was once one of Australia’s favourite ISPs.
See Also: Inside The Downfall Of iiNet Sydney
iiNet’s Sydney office was shut down late last month and most of the remaining workers were made redundant. Many customer service roles had been moved offshore to call centres, mainly in Cape Town, South Africa. A number of team members had been shuttered over to iiNet’s TransACT division before the office was closed down.
One former worker who was with the office until the very end told Lifehacker Australia that a number of changes implemented by the company since it was acquired by TPG resulted in a dramatic drop in staff morale and customer service levels.
Office perks such as weekly fruit deliveries and company funded outings evaporated. Then there were restrictions being placed on customer service representatives and teams were gradually downsized. (You can find out more details from our previous article here.)
It appears those practices weren’t isolated to the Sydney office.
A Blow To Customer Service
iiNet confirmed to Lifehacker Australia earlier this month that it had taken away customer service representatives’ ability to offer $50 credit to customer accounts without approval from upper management. But iiNet general manager of customer service Matt Conn explained the change in credit policy was well-intended.
“Fixing the root cause of a problem instead of applying credit to appease a customer is something we’re focused on,” he said.
The changes were company-wide. One former iiNet employee from the Melbourne office said the new crediting policy adversely affected customer service because overseas call centre staff were unable to adjust to the changes.
“There’s an issue with the culture in the Cape Town call centre. Since the ‘manager approval for every credit’ came in, Cape Town managers track every credit and it’s a race to the bottom for each representative,” the source, who left iiNet a few months ago, told us. “So naturally, the customer service representatives promise to credit customers for mistakes but never actually apply them. Next month, the customer gets the bill; no credit. Customer calls back and the issue escalates.”
iiNet’s Net Promoter Score (NPS), which is used to gauge customer satisfaction towards a brand, once sat well above 60. Earlier this month, it was at 54.
Melbourne Office Was Ear-Marked For Closure
Conn told Lifehacker Australia there were no immediate plans to close down the Melbourne office. After sighting an internal email, we can now confirm iiNet had planned to close down the Melbourne office back in August and move the remaining staff to TPG’s offices in Richmond, Victoria.
This has been confirmed by two former Melbourne iiNet staffers we spoke to. Both of them also noted that since the TPG acquisition, the iiNet workforce in Melbourne has roughly halved; down from 200 workers.
“There was a huge cull of managerial staff not long after I left; I would estimate at least three-quarters of the managers at the Melbourne office got made redundant,” one of the sources, who was with the company for four years before leaving a few months ago, said. “This along with the corporate and technical staff that also got let go or left on their own accord.”
Lifehacker Australia understands that the office closure has been put on hold – for now.
Our other source from the Melbourne office noted that one of the biggest reasons for the steep increase in customer complaints against iiNet is changes in the way it does behind-the-scenes tech support:
TPG’s Manila (Philippines) staff are being trained in iiNet roles. It’s mostly off-the-phone, behind-the-scenes work; the monkeys that put out spot fires before they become an issue and fix stuff before the customer knows it broke.
We used to do a lot of that in Melbourne. It’s all done in Manila now, by TPG staff who don’t have the same training or technical knowledge, and there’s not enough people doing it either so the workload is HUGE.
Plus with sales representatives [also many in overseas call centres] not being trained properly and putting the wrong information into the signup form, the automation breaks. This means a human steps in. That used to be Melbourne, now it’s Manila.
iiNet’s Matt Conn was eager to point out that skyrocketing complaints over the past year were largely a result of issues with NBNCo, the company that wholesales National Broadband Network (NBN) services to ISPs. NBNCo technicians are responsible for connecting NBN services to customers after an ISP has sold them. This is out of the ISP’s control and if there are issues with NBNCo, customers can’t complain about them to the TIO, so they file a complaint against the ISP they bought the service from instead.
While our source agreed that NBNCo’s unreliable technical support contributed to the rise in complaints, iiNet’s internal processes are apparently also to blame.
“For about four months after NBNCo’s fibre-to-the-node (FTTN) plans went on sale, there was no automation and every application was processed by hand,” our source said. “There were, I think, 4-5 people processing them.”
iiNet did not train extra staff for the processing and the workload was enormous. iiNet didn’t ease off on its efforts to spruik NBN services either.
“TPG’s focus was sales,” our source said. “They hired a boatload of sales representatives in Cape Town [for iiNet] and gave them more financial kickbacks for each sale. But not more support representatives, so post-sales support is non-existent.”
Meanwhile, In Perth
Perth is where iiNet was founded and where its headquarters is currently located. A few years ago, there were upwards of 600 staff on-premise. According to a source who worked in the Perth office until recently, that number has also been halved. Our source was with iiNet for nearly four years.
“I started working at iiNet in 2013. At that time the company was well known for sticking up for its customers’ privacy. My impression was that iiNet had a genuine interest in improving internet access for all Australians,” the source told Lifehacker Australia. “I found another job and resigned at iiNet because I could no longer achieve a satisfactory level of customer service.”
The source was keen to point out that iiNet was not the perfect company even before the acquisition went through. For example, our source noted that the base wage for workers was relatively low, but it was a business that genuinely worked towards bringing about positive changes to the Australian telecommunications industry.
When the acquisition was going through, our source did have hope that TPG’s takeover would aid iiNet’s future.
“I’ve heard that TPG infrastructure and engineering/architecture is better than what we had at iiNet. I’ve heard that TPG was able to drive better bargaining with our wholesale providers for mobile plans,” our source said. “As the sale went through I felt that it might be possible for iiNet to achieve more without being hindered by an executive board that had seemed to have become unfaithful to [iiNet founder] Michael Malone’s vision for the company.”
Malone left his post as iiNet’s managing director in 2014 but remained a shareholder. He was vehemently against the TPG acquisition.
Our source’s optimism for the acquisition faded in the past year as TPG brought about sweeping changes that affected staff morale and increased customer complaints.
“There just weren’t enough staff to keep call queues or tasking under control,” our source said. He noted that a lot of the technical staff fled to other places of employment as fast as they could after the acquisition. The situation was exacerbated by the fact that iiNet went into a hiring freeze in the lead up to the TPG takeover.
Then there were missteps that threw various departments in iiNet into disarray. Days after the acquisition was approved, TPG forced iiNet to kill off its Fetch TV product.
“[TPG and iiNet] then realised that breaking the contract with Fetch would be prohibitive so they put Fetch in sleeper mode instead,” our source said. “Then they eventually put Fetch back but by then they had caused severe damage to our Fetch department and momentum.”
iiNet’s rewards and bonus programs have also been neutered since the TPG acquisition. According to our source, iiNet base salary in Australia was low but there was a potential to earn up to $800 per month in bonuses if certain targets were met.
“In the first two years I worked at iiNet it was common to achieve it,” our source said. “In 2016, it became almost impossible for most of the technical teams to achieve it as everybody is getting slammed with detractor surveys from unhappy customers.”
The Fate Of Internode
iiNet acquired South Australia-based ISP Internode in 2011 for $105 million, prior to the TPG buyout. Co-founded by Simon Hackett, Internode was also a well-loved ISP in Australia and its culture aligned well with iiNet.
Hackett left his position as Internode’s managing director in 2012 to join the board of iiNet. A year later, he resigned from iiNet and joined the board of NBNCo. Earlier this year, he passed the baton to Malone and went on to become the CEO of Redflow.
While iiNet had been rapidly integrating Internode’s operations into its own business, there was still a degree of separation between the two companies. At the time iiNet was acquired, TPG had committed to retaining both the iiNet and Internode brands.
There is a sense that Internode has been somewhat protected from the changes, but sources from the Sydney, Melbourne and Perth offices have indicated that the company is rapidly becoming less independent.
“Internode sales are moving more and more into Rumba (iiNet’s billing system) and out of SNBS (Internode’s billing system, literally ‘Shiny New Billing System’),” our source from Melbourne said. “If past history is anything to go by, as soon as the migration into Rumba reaches 80% or so, the brand will be retired.”
Our source from the Perth office also noted the situation looks dire for Internode:
Adelaide has had a large group of developers from Internode and Adam Internet (another company iiNet acquired) but they have lost their job security as their migration projects seem to be coasting now. Internode especially struck me as one of the most tech savvy internet companies in Australia with a properly appreciative customer base. Now it looks like they are increasingly being left to be poorly integrated into iiNet.
In September, TPG posted a record 69% rise in full year profit to $379.6 million. Revenue was up 88% to $2.388 billion. The results were bolstered by the iiNet acquisition.
It’s clear that buying iiNet made business sense to TPG. But it has come at the cost of iiNet’s vibrant work culture and reputation as an ISP that puts customers first.
Lifehacker Australia was contacted by a number of former iiNet employees who confirmed that things at the once beloved ISP have gone south.
Although many of them refused to speak on record, it’s clear that they were passionate about the iiNet brand and are deeply disappointed to see the decline of a respected Australian company.
“I’ve had the pleasure of some of the most amazing co-workers at iiNet; amazingly intelligent, customer service focused people who have passion, humour and excellent perseverance,” our Perth source said. “I think they are being treated pretty poorly in the current setup.”
Lifehacker Australia reached out to TPG and iiNet for additional comment for this article but they did not get back to us at the time of publication.