Telstra confirms 1,400 jobs to go in Australia

Extract from ABC News

By business reporter David Chau

Updated yesterday at 6:05pm

Photo: Telstra has been under pressure since reporting reduced profit in February. (AAP: Joel Carrett, file photo)

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Telstra has confirmed it will cut 1,400 jobs within Australia as part of a cost-cutting initiative.

"Today, we announced a series of structural reorganisations which are very much about aligning the business to reduce complexity [and] create a leaner business," Telstra chief executive officer Andy Penn said.
He said the job cuts were due to "the increased competitive dynamics of the market and the acceleration of the rollout of the NBN (National Broadband Network)".
Mr Penn also confirmed the decision will affect jobs across several business units and states.

An "appalling" move by Telstra

Shane Murphy, the Communications Union's divisional president and NSW secretary, said the move was "appalling" and had "obviously been months in the planning by the executives".
Mr Murphy said the workers and the union were "ambushed".
"There had been no indication or any signs given to the union or workforce — up until a text message received by staff shortly before 10.30am today," he said.
"They were asked to join a teleconference at 11:00am, and advised 1,400 of their jobs would no longer apply in the next six months."
The union and Telstra will meet on Thursday afternoon to discuss the matter further.
As for which jobs were cut, Mr Murphy explained they were in across many areas — including maintenance, construction, technician, and call centre jobs.
"This is a massive job cut broadly spread across most of Telstra's business units," he said.

"It will have an overwhelming effect not only on our members, but their families as well as customer service across the country."

The job cuts are expected to begin early next month.
Before then, the union intends to change Telstra’s position and lobby the Government to "put protections on Australian jobs, rather than continue to offshore Australian jobs overseas".
The union confirmed it is not planning a workers’ strike or industrial action as Telstra currently has an enterprise bargaining agreement in force.

Reasons for Telstra's fall in revenue

According to telecommunications analyst Paul Budde, Telstra's decision to slash jobs was because "for the last few years, growth has been very slow in the telecommunications industry".
"To remain profitable, telcos need to cut costs rather than increase revenue — which is more difficult," he said.
The most at-risk jobs would be in administration, customer service and network operations as they are easily automated by improvements in technology, he explained.
However, a key problem for Telstra is that "its revenue is coming mainly from its infrastructure base, rather than value-added services".
For example, "NBN Co has taken over quite a large part of the [NBN] infrastructure," Mr Budde said.

"So a lot of the work Telstra did with the old copper network is no longer required."

Mr Budde also suggested telcos are finding it difficult to compete with Facebook, Google and Skype which offer more efficient, lower-cost ways for people to communicate.
Telstra has been under pressure since February, when it posted a first-half net profit of $1.8 billion — down 11.8 per cent compared to the same period last year.
Its revenue also fell 3.4 per cent to $12.8 billion.
The company cited "planned restructuring costs" as a reason for its reduced profit.
At the close of trade, Telstra shares were nearly 0.5 per cent lower at $4.36.