Published: Wed, June 20, 2018
Business | By Tara Barton

Telstra to slash 8000 jobs in major cost-cutting plan

Telstra to slash 8000 jobs in major cost-cutting plan

The announcement on Wednesday morning is part of raft of structural changes unveiled at the telco that have sent Telstra shares down more than seven per cent in early trade on the ASX, with the stock touching $2.70 at 1024 AEST - it's lowest level since 2011.

The "Telstra2022" strategy stems from the telco's strategic investments announced in 2016, and will be made up of four pillars involving establishing a standalone infrastructure business; simplify its structure; a cost reduction program and portfolio management; as well as simplifying its product offerings, eliminating customer pain points and creating all digital experiences.

"In the future our workforce will be smaller, knowledge-based one with a structure and way of working that is agile enough to deal with rapid change. This means that some roles will no longer be required, some will change and there will also be new ones created", Penn said.

Telstra, Australia's former telecommunications monopoly, is also planning to split its infrastructure operations, which include data centers and broadband cables, into a separate unit and will drastically slim down the number of products it offers customers.

In May, Telstra announced a downgrade of its results for FY18, saying it would come in at the bottom end of guidance - between $10.1 billion and $10.6 billion. The company's shares have lost more than half of their market value over the past three years.

26 killed as ISIS attacks Taliban & Afghan forces celebrating Eid
The Taliban cease-fire took effect at midnight on Thursday. "Our country is being destroyed and we have all become beggars". Photos were taken of Afghan Interior Minister Wais Ahmad Barmak meeting with Taliban fighters on the streets of Kabul .

"In this environment traditional companies that do not respond are most at risk".

Mr Penn added the cost of the changes would be about $600 million, with the company putting forward $50 million for a transition program to support those affected by the cuts.

"We have worked hard preparing Telstra for this market dynamic while ensuring we did not act precipitously". It will manage Telstra's fixed network infrastructure including data centres, non-mobiles related domestic fibre, copper, HFC, worldwide sub-sea cables, exchanges, poles, ducts and pipes.

Called Telstra InfraCo, it will comprise the telecom's fixed-network infrastructure including data centres, non-mobiles related domestic fibre, worldwide subsea cables, exchanges, poles, ducts and pipes.

"As technology innovation is increasingly relying on connectivity, the role of telecommunications infrastructure is becoming more important", said Mr Penn. "By creating a new infrastructure-focused business unit we will better optimise and manage these assets". It would contain assets of about $11 billion, revenue of about $5.5 billion and earnings before interest, tax, depreciation and amortisation of about $3 billion.

Like this: