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May, 2024

Telstra cuts up to 2800 jobs amidst sweeping structural changes

Telstra has confirmed that up to 2,800 jobs may be on the chopping block as the telecommunications business looks to introduce a range of cost cutting measures that will see significant organisational changes to its direct workforce.

In a note posted to the Australian Stock Exchange this morning, Telstra CEO Vicki Brady said that the measures are necessary for Telstra to support the ever-increasing growth in data volumes on its networks and deliver improved connectivity for customers.

“Telstra’s ongoing investment in infrastructure, technology, innovation and service for our customers drives growth and underpins Australia’s digital economy, contributing to the prosperity of the nation,” Brady said. “This is occurring within a dynamic environment, with an evolving competitive landscape, rapid advances in technology, changing customer needs, and the ongoing inflationary pressures facing all businesses.”

The company is resetting its Enterprise business, simplifying operations, and improving productivity. It will also update its customer terms for its postpaid mobile plans to remove the annual CPI-linked review of prices.

Brady said: “This approach reflects there are a range of factors that go into any pricing decision, and will provide greater flexibility to adjust prices at different times and across different plans based on their value propositions and customer needs.”

The reset of the Enterprise business and other organisational changes could see up to 2,800 roles removed, mostly by the end of 2024. Consultation on 377 of those roles will begin immediately, mainly from areas supporting the products and services to be exited in Enterprise.

Brady acknowledged the impact of these changes on the workforce. “I appreciate the uncertainty proposed changes like this can create for our people and we will support them through this change with care and transparency. As we propose specific changes, we will talk them through with our teams and union representatives first.”

Telstra will also reshape some of its internal operations by moving its Global Business Services function into other parts of the business. The company expects to achieve $350 million of its T25 cost reduction ambition by the end of FY25. One-off restructuring costs of $200 – $250 million are expected across FY24 and FY25.

Brady reaffirmed the company’s FY24 guidance and provided FY25 Underlying EBITDA guidance of $8.4 – $8.7 billion. “Our continued confidence in our capacity to grow mobiles’ revenue and EBITDA, along with clear actions on cost out and to reset our Enterprise business, has allowed us to bring forward our Underlying EBITDA guidance for FY25,” she said.

Brady concluded by outlining Telstra’s long-term strategy. “Our strategy beyond T25 will build on the momentum created over recent years and help set the organisation up for success through to 2030.”