Telstra to cut 8000 employees, contractors by 2022

Galtero Lara
Junio 20, 2018

The embattled telco said on Wednesday it is targeting a further $1 billion in cost cuts by 2022, taking the total cost reduction to $2.5 billion.

If it can execute Telstra would vastly simplify the complexity of its products and its processes, improving the customer experience and lowering its own costs in the process.

The ambition is to position Telstra InfraCo to be a standalone business by June 2019 and able, once the NBN roll-out has been completed early next decade, to either be de-merged or to attract a strategic investor.

Telstra CEO Andrew Penn defended the job cuts, saying he was "creating a new Telstra" that could lead the increasingly competitive telecommunications market.

"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.

It is the latest in a string of job cuts made by Telstra in recent years. "This means some roles will no longer be required, some will change and there will also be new ones created".

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"We have worked hard preparing Telstra for this market dynamic while ensuring we did not act precipitously".

Restructuring costs are expected to reach AU$600 million for FY19, with an earnings before interest, tax, depreciation, and amortisation (EBITDA) guidance of between AU$8.7 billion and AU$9.4 billion by then.

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.

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.

Reducing 2-4 layers of management across the organisation.

Its services will be sold to Telstra, wholesale customers and Australia's National Broadband Network, controlling assets with a book value of about A$11 billion.

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