New Zealand's Telecom has cut 400 jobs in 2011, most of which are out of redundancies while others were resignations that were not replaced, the company said in its latest report.

As this develops, Telecom has yet to name anyone for its soon-to-be vacated CEO position.

Head of Group Communications Ian Bonnar told the New Zealand Herald the reduction was a combination of not replacing staff who had left and a "small number of redundancies."

Mr. Bonnar hinted the company, which has 7,000 employees, will have more job cuts. Still, he said there is no specific target when it comes to staff size.

"We have a well-stated strategy of simplification - the removal of duplication and reduction in errors and rework ... it's natural that as we make progress with simplification then fewer people will be required," he said, adding that Telecom aims to have the right size of staff amid declining revenues in markets everywhere.

In a related matter, Telecom in 2011 drew heavy criticisms from the Shareholders' Association, which said the salaries it paid were unacceptably high, given the price of Telecom shares.

Asked whether Telecom's new chief executive would receive a smaller pay package than outgoing chief executive Paul Reynolds, Mr. Bonnar said, the board would decide on the matter.

Mr. Reynolds received total remuneration of $5.2 million during the year to June 30, 2011, Telecom's annual report shows.

One of the potential candidates to replace Mr. Bonnar is Chris Quin, chief executive of Telecom's information and communication technology branch Gen-i.

Telecom's CEO position will become available in July.

Telecom reported an adjusted net profit of $240 million for the six months to December 31, up 51 per cent compared with the previous corresponding period.

Telecom shares rose 5.5c on the NZX on Friday to close at $2.38.5c.