Yahoo Finance Telstra a ‘national disgrace’ over job cuts
Telstra has been lashed as a “national disgrace” for its sudden decision to scrap up to 2800 jobs, with the majority of cuts set to happen by the end of this year.
In a notice to the ASX shared on Tuesday morning, the telco giant said consultation for 377 of the redundancies would begin immediately.
Losses will mainly effect B2B Telstra Enterprise teams, and will form the bulk of $350m of savings Telstra hopes to achieve by the end of the 2025 financial year.
Communication Workers Union national assistant secretary James Perkins, who represents Telstra workers, said the union had no knowledge of the cuts, prior to the ASX announcement.
He questioned how the cuts, which equated to about nine per cent of its workforce, would allow Telstra to “maintain the service that people expect”.
“Workers are already facing the brunt of cost of living pressures and now they’re having to contend with attacks on their jobs,” he said.
“This is a national disgrace from our national carrier.”
He said the CWU would meet with Telstra representatives on Wednesday and Thursday, and were seeking more information about what departments and states the cuts would occur in, as well as whether regional or rural staff would be affected.
In the interim, he called on the business to halt the cuts.
“This is a highly profitable business. If Telstra are seeking to improve efficiencies, the union and its members are more than happy to sit down and have those discussions,” he said.
In the fall out of the slashes, Telstra’s chief executive officer Vicki Brady has defended the decisions as “necessary,” and said the staffing cuts would not impact Telstra’s customer service teams.
“We have invested significantly in our customer service over recent years. That includes on-shoring our call centres for consumer and small business customers, it includes buying back our stores to deliver consistently good experience,” she said.
“None of these changes impact those commitments.
“As we work through the further changes still to come that I expect to be able to share with our employees in mid-July, customer service and experience will continue to be a key priority in that.”
Speaking about the job cuts, Treasurer Jim Chalmers said this thoughts were for the people impacted by the announcement.
“This is a very distressing day for a lot of people who have received this bad news today from Telstra and we’re thinking of all of the families who are impacted by these big job cuts at a major Australian employer,” he said.
“We need to make sure that the services don’t suffer as a consequence of these changes.
We will be seeking advice from the ACCC about some of the claims that Telstra is making about their new pricing strategy and the role of the NBN.”
Brady: Changes ‘necessary’
She defended the move as “necessary” so telco giant could “make the investments needed” to support ever-increasing growth in data volumes on its networks and deliver improved connectivity for customers across the country”.
It comes as the company scales up AI adoption.
In February this year, Telstra announced it was expanding two in-house developed generative AI solutions following “promising pilots with frontline team members, enabling faster and more successful interactions with customers”.
“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,” Ms Brady said.
“As we proposed specific changes, we will talk them through with our teams and union representatives first.”
Ms Brady said job cuts come as the business struggles to meet its “cost-cutting ambitions,” blaming “higher-than-expected inflation,” and cost pressures like high energy costs.
Ms Brady added affected employers would be given “industry-leading redundant packages,” which includes transition support.
“It includes career transition support which will involve ongoing access to learning over a six-month period post leaving Telstra to help move to their next role,” she said.
Tuesday’s directive also flagged a number of other changes, like deploying its Global Business Service function to other parts of the business, and other actions to “reduce its non-labour and indirect labour costs”.
The initiatives would save the company $350m by the end of June 2025, with the company forecasting a one-off restructuring cost between $200m to $250m across the 2024 and 2025 financial years.
The restructuring costs will also factor in the redundancy payout for employees, with Ms Brady adding the charge was “over and above our ordinary redundancy cost”.
In the same directive Ms Brady also announced it would remove annual inflation-linked price increases for its postpaid mobile plans.
This means eligible Telstra customers will not be hit with a price change in July this year.
“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,” she said.
