Telstra to line up 6,000 jobs to cut by end of fiscal year

As it brings forward discussions on which jobs will go to take total restructuring costs up to AU$800 million for the 2019 financial year.
Written by Chris Duckett, Contributor

Telstra has informed the ASX that "as a result of good progress" on its T22 plan, it will be bringing forward talks on job cuts. 

As a result, the company will flag 6,000 jobs to go by the end of the financial year.

"Telstra is also ahead of plan on the simplification of its structure and ways of working announced as part of T22, which as previously announced is expected to lead to a net reduction of around 8,000 employees over three years," the company said on Wednesday.

"Telstra today commenced consultation with employees and representative unions on proposed job reductions previously expected to be announced in the first half of FY20."

Consequently, the Australian telco said it would need to raise its FY19 restructuring costs from AU$600 million to AU$800 million, and would have AU$350 million in restructuring costs after its 2019 financial year.

"While impacted employees will not be leaving the organisation until early FY20, consultation is expected to conclude in mid-June and therefore the costs will be included in Telstra's FY19 results," Telstra said.

At the same time, Telstra said it would write down the value of its legacy IT assets by AU$500 million.

Telstra CEO Andy Penn said the company had a potential AU$50 million transition program for affected workers, and that by the end of the fiscal year, it would have completed 75% of its "direct workforce role reductions".

"We will continue to see role reductions as we replace our legacy systems, digitise and simplify how we work, and respond to things like declining NBN and call volumes, but if a final decision is made on the proposal announced today we expect the majority of our T22 restructure will be behind us," Penn said.

"Overall we are on track in relation to our T22 program."

Under the T22 plan announced in June 2018, Telstra projected it would cut 9,500 jobs, remove 25% of executive and middle management roles, and create 1,500 new jobs largely in software and cybersecurity roles.

"This simplification is crucial to Telstra's competitiveness, and we expect it to lead to a 30% reduction in our labour costs," Penn said at the time.

Telstra'a long-promised simplified mobile plan structure is set to be announced next month.

Last week the telco announced it would charge AU$15 a month for 5G connectivity after customers are given the first 12 months free.

In December, Telstra announced new small business plans.

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