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Telstra job cuts not just about the 'slash and burn'

While its competitors go through cutting hundreds of jobs across the board, Telstra CEO David Thodey said that the company constantly evaluates its productivity, and adjusts as required.
Written by Josh Taylor, Contributor

While Optus and Vodafone slash their workforce numbers, Telstra CEO David Thodey has said that the company is trying to look beyond just reducing the headcount.

Although Optus and Vodafone are cutting 750 and 500 jobs respectively this year, Telstra has also cut 2,000 positions, and yet the company's overall headcount has remained the same.

In Vodafone's case, the company is cutting office roles, and is looking at what customer-facing roles can go. Optus said that its cuts will come from senior and middle management, operations, back office, and support, but the company is focusing on retail experience, adding 33 new stores across the country and around 200 new jobs.

For Telstra, it has been more about cutting call-centre staff. However, the headcount has remained the same as Telstra invests more money in its Network Applications and Services (NAS) division, Thodey said yesterday.

Thodey said that Telstra's approach to workforce changes is to analyse each part of the company every quarter.

"We look for productivity improvement every year in every division, and that's the only way you can look at it," he said. "I can't comment on other companies, but we've got to do it every quarter. [We look at] every part of the business; whether it is sales, whether it is media, whether it is service, [or] field technicians.

"The days of the big programs where you get into trouble and you cut 10 percent, it's just destructive to the business. You've just got to keep at it. It's looking at every part of the business; it's really disciplined, hard work."

Robert Nason, Telstra's group MD for business support and improvement, said that the company had in the past relied too much on outsourcing, especially for IT, but that this has been rectified.

"We've done quite a bit of in-sourcing of what we've previously outsourced," he said. "In IT, we felt we went too far outsourcing, and we've brought that back in, so I think each business needs to look at that in its own right as an issue, and what the best labour model is.

"We're not about a slash-and-burn exercise. We're about creating a telecommunications company of the future with a staged migration model."

Telstra is also looking for deeper but fewer relationships with suppliers. The company has already cut the number of suppliers it uses by 29 percent, and this is expected to go up to 35 percent by the time Telstra is finished.

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