Telstra Slashes 8,000 Jobs As Part Of A New Strategy To Cut Costs
The cuts are part of a restructure that claims to improve customer experience, simplify structure and cut costs.
What you need to know
- Telstra will cut 8,000 jobs over three years as part of a company restructure
- CEO Andrew Penn said the cuts are necessary to remain competitive in the telecommunications industry
- The massive company overhaul claims it will add $1 billion to the company's value
Telstra has announced it will cut 8,000 jobs as part of a company restructure.
The troubled telco said they will simplify its operations and product set as well as cutting costs.
"This is very difficult news -- it does have an impact on the number of jobs at Telstra and we anticipate that about 8,000 roles, net, will leave the company over the next three years," Telstra CEO Andrew Penn told journalists on Wednesday.
"If we're going to be competitive, if we're going to deliver the sort of products and services to our customers, if we're going to deliver for our shareholders, I have to be authentic and I have to be transparent that that's the scale of change that Telstra needs today," he said.
The job cuts will initially focus on executive and management roles as compared to customer-facing roles and 1,500 new jobs in the software engineering and cyber-security areas will be created.
The scale of the strategy involves a massive overhaul of the company which includes product simplification, the creation of a stand alone infrastructure business called Telstra InfraCO and a reduction of the work force all as a means of increasing company productivity.
In fact, the new Telstra 2022 strategy claims to increase company revenue by an additional $1 billion.
Telstra has not revealed any details about InfraCo or how it will operate.
The new strategy has four key pillars, one of which is simplifying products available to customers.
"Let me put this in perspective," Penn said.
"We have more than 1,800 plans for our consumer and small business customers in the market. We are reducing that to 20. That is the sort of complexity that exists within the telecommunications industry today and it exists because telcos have ultimately added onto the existing plans and constructs. We need to make it simpler for our customers."
The other three pillars claim to establish Telstra InfraCo, simplify the structure of the business and cut costs in programme and portfolio management.
Communications Minister Mitch Fifield acknowledged the job cuts announcement would be difficult news for Telstra employees to hear.
"It's a difficult day for the staff of Telstra and our thoughts are very much with them," Fifield said.
"It's up to each telco business to make judgements as to the best way to meet the needs of their customers and the best way to satisfy their shareholders. Telstra have determined that this is the program that they will pursue to provide the service that their customers expect."
Telstra shares were down five percent at the start of trade following the announcement.