TELSTRA is going to slash 8000 jobs from its workforce as part of a new strategy to "improve customer experience, simplify structure and cut costs".
The telecommunications giant says it will cut 8,000 employees and contractors - including one in four executive and middle management roles - to "flatten the structure".
The cuts come less than a month after Telstra warned that its 2017/18 earnings will likely be at the bottom of its guidance range of $10.1 billion to $10.6 billion, blaming increasing competition in mobile and fixed broadband, and rising costs from the NBN.
Telstra chief executive Andrew Penn said the strategy would fundamentally change the nature of telecommunication products and services in Australia.
"We will take a bolder stance and use the disruption in the telecommunications industry to lead the market for the benefit of our customers, employees and shareholders," he said in statement.
"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.
"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."
8,000 jobs to be axed by @Telstra. They say it is part of a plan to simplify their operations and reduce costs. One in four executive and middle management roles will be axed to "flatten the structure" of the business. https://t.co/6ATjgPDnEM #7News https://t.co/5hjr0rKmzh— 7 News Brisbane (@7NewsBrisbane) June 19, 2018
Known as Telstra2020, the three year strategy will see the company focus on four key goals:
- Telstra hopes to create all digital experiences by greatly simplifying product offerings and eliminating customer pain points.
- The telco wants to establish a stand-alone infrastructure business to drive performance and give options following the nbn rollout.
- To better serve customers, Telstra will radically simplify its structure and ways of working
- It hopes to implement an industry leading cost reduction program and perform better portfolio management.
Mr Penn said the 8000 job losses were sadly a "consequence of the plan" to flatten the structure, but said there could also be new positions created as a result.
"We are creating a new Telstra that is able to continue to lead the market. In the future our workforce will be a smaller, knowledge-based one with a structure and way of working that is agile enough to deal with rapid change," he said.
"This means that some roles will no longer be required, some will change and there will also be new ones created.
"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 the strategy leverages the capabilities already being built through Telstra's $3 billion strategic investment announced in August 2016 and would be underpinned by the 5G network.
"The network investments have been critical as Telstra builds capability in software defined networking and prepares to lead the market and win in 5G," he said,
"We will be network ready in the first half of FY19 with full rollout to capital cities, regional centres and other high demand areas by FY20."
Asked about the job cuts today, Treasurer Scott Morrison said: "The government has been working hard to ensure the economy that they will go back into now to find another job, there are more jobs in that economy today than there were before."
Mr Morrison said there were "brighter prospects" in the telecommunications sector than previously "but it still will be hard and it still will be an anxious time for those Australians."
He said the government would continue redouble efforts to create a stronger economy.