Telstra restructure axes 8,000 jobs

Marco Green
June 20, 2018

The head of Australia's Communication Workers Union has called for Telstra chief executive Andy Penn to walk back major workforce cuts announced by the telco this morning, criticising the move as "putting short-term profits above long-term services" for Australians.

Chief executive Andy Penn defended the job cuts and other announcements, arguing that competition from the likes of Optus and Vodafone demanded a "bolder stance".

It is understood that one in four executive and middle management roles will be slashed.

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"As technology innovation is increasingly relying on connectivity, the role of telecommunications infrastructure is becoming more important", Penn said.

"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".

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

"We are now at a tipping point where we must act more boldy if we are able to continue to be the nation's leading telecommunications company", Mr Penn said.

Telstra has a range of businesses including fixed broadband, mobile, data and IP, network application and services, digital media and worldwide.

"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".

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

It plans to split its infrastructure assets into a new wholly owned business unit in preparation for a potential demerger, or the entry of a strategic investor, in a post-national broadband network rollout world. It will include fixed networks, data centres, non-mobile fibre, the HFC network, global sub-sea cables, exchanges, ducts, pipes, NBN-related revenues and relationships and Telstra Wholesale.

The concept of separating its network assets (other than its mobile network) from its retail businesses has been a constant in internal and external discussions about Telstra long before Kevin Rudd and Stephen Conroy announced the 2009 plan to build the NBN and destroy Telstra unless it co-operated. As a result, the telco expects FY19 EBITDA guidance to range between $8.7 - $9.4 billion, excluding about $600 million in restructuring costs.

Other reports by Click Lancashire

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