Telstra to axe 8,000 jobs in cost-cutting drive,
shares dive to seven-year low

Telstra CEO Andy Penn has announced a drastic plan to cut costs at the struggling carrier, including a reduction of 8000 jobs from its workforce, about a quarter of its total headcount.

In early trade, shares in Telstra plunged more than 5.5 per cent, or 15¢, to a seven-year low.

As part of a new strategy dubbed 'Telstra 2022', the company said it would increase its cost cutting target from $1 billion to $2.5 billion over the next four years.

Between two and four layers of middle management layers would be eliminated, it said.

Telstra has just over 32,000 employees so the job cuts could affect about one quarter of its workforce.

Union officials on Wednesday said the announcement represented one of the largest round of job cuts in Australian corporate history.

"Today's jobs purge is the low-point of 20 years of privatisation, which has consistently taken the lower road of cutting jobs rather than investing in vital community infrastructure," Communications Workers Union national president Shane Murphy said.

"On behalf of Telstra workers and Telstra customers, I am calling on CEO Andy Penn to reconsider this drastic action.

Mr Penn has been under pressure to revive the ailing telco which has been struggling due to increased pressure in the mobile market and thinner than expected margins under the NBN.

Telstra also said it would set up a new infrastructure unit, dubbed InfraCo, to house its network assets, data centres international subsea cables, exchanges, poles, ducts and pipes.

And it said it intends to "monetise assets of up to $2 billion" over the next two years to strengthen its balance sheet.

Mr Murphy condemned Telstra's deep cuts and accused the company of putting "short-term profits above long-term services" for the Australian public.

"Telstra's decision to slash 8000 jobs will devastate thousands of Australian families and have a significant impact on Telstra's ability to deliver for consumers," he said.

"In an industry which is booming, Telstra has clearly chosen to prioritise short-term profits to keep shareholders happy, instead of investing in the future of Australia's network."

Telstra expects to incur $600 million in restructuring costs due to the changes. It hinted that the InfraCo unit could be sold once the NBN rollout is finished.

"InfraCo will provide significant optionality for Telstra in the future for a potential demerger or the entry of a strategic investor once the NBN rollout concludes," it said in a release to the sharemarket.

Since early 2015, over $40 billion in Telstra's market value has been incinerated, and the carrier's shares have been languishing near their lowest levels in seven years.


"The rate and pace of change in our industry is increasingly driven by technological innovation and competition. In this environment traditional companies that do not respond are most at risk," Mr Penn said in a statement to the ASX.

"We have worked hard preparing Telstra for this market dynamic while ensuring we did not act precipitously. However, we are now at a tipping point where we must act more boldly if we are to continue to be the nation’s leading telecommunications company.”

A Telstra employee said it was an anxious time for staff as they awaited further details of how the massive restructure would affect their particular departments.

"It's quite a hit", the employee said. "There will be announcements all throughout this week and next week."

Telstra said the restructuing "will result in a net reduction of 8000 employees and contractors over the next three years."

The initial focus will be on the reduction of executive and management roles, and the impact on customer facing teams will be minimised, it said

Telstra will also create about 1500 new roles in software engineering and information and cyber-security.

"We understand the impact this will have on our employees and once we make decisions on specific changes, we are committed to talking to impacted staff first and ensuring we support them through this period," Mr Penn said.

Maybe they could close down the support services in India and open up the jobs here in Australia?

Telstra to axe 8,000 jobs - jobsungroth says mal

Mals new spin. We have created 1 million minus 8000 jobs LOL

Sir lastnail wrote on Jun 20^th, 2018 at 12:03pm: