Telstra axes 8,000 jobs, shares plummet

Cornelia Mascio
Giugno 20, 2018

Announcing the move to shareholders this morning, the telecommunications giant said it planned an "8,000 net reduction in employees and contractors" in a strategy nicknamed "Telstra2022".

Of the jobs to go, one in four will be executive and middle management roles.

Telstra is axing 8000 jobs over the next three years as it tries to save $1 billion while tackling the cost of investing in new technology and increased competition from its rivals.

"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", Telstra CEO Andy Penn said in a statement to the ASX.

"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", Mr Penn said.

Ratings agency S&P last month downgraded Telstra's debt for the first time in 12 years, highlighting the company's dwindling market share amid rising competition in Australia.

CMC Markets chief markets analyst Michael McCarthy said the restructure plan may not be enough to please investors, who have watched Telstra's share price almost halve to just under $3 in the past year.

Mr Penn said while roles would no longer be required, he was hopeful new positions might be created.

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

"We are creating a new Telstra that is able to continue to lead the market".

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. 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.

'That is a very significant number of employees - even over that period of time - and this is going to be a very hard day for every Telstra worker, ' Mr Marles told Sky News on Wednesday.

The standalone infrastructure business will be called "Telstra InfraCo" comprising Telstra's fixed network infrastructure including data centres, non-mobiles related domestic fibre, copper, HFC, worldwide subsea cables, exchanges, poles, ducts and pipes.

Telstra said there was no issue for its own customers on 3G or 4G networks but a "vendor platform issue" had affected reseller services for "a small number of wholesale customers".

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