Friday, 20 March 2020 12:19

COVID-19: Telstra says no additional job cuts for next six months Featured

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Andrew Penn: "The most important thing is that as many businesses as possible are still here when we get through this crisis." Andrew Penn: "The most important thing is that as many businesses as possible are still here when we get through this crisis." Supplied

Telstra has announced that it would put on hold any further job cuts for the next six months, adding that its program to cut 8000 jobs in total by 2022 to reduce underlying fixed costs by $2.5 billion would continue as usual.

Chief executive Andrew Penn said in a statement that the measure was one among a number of actions that the telco was taking as part of its contribution to national economic stimulus response to the coronavirus outbreak.

Regarding the company's outlook for FY20, Penn said the outlook was within the range of the guidance set out in the half-year results market release on 13 February.

That outlook is at the bottom end of the range for both free cash flow and underlying EBITDA, at the bottom end of the range of $0-500 million for growth in underlying EBITDA (excluding the in-year NBN headwind) and at the top end of the range for capex.

The company announced the following measures on Friday:

  • Putting on hold any further job reductions. While Telstra will continue to focus on its productivity program to reduce underlying fixed costs by $2.5 billion annually by the end of FY22, it will not announce any further job reductions over the next six months.
  • Recruitment of an additional 1000 temporary contractors in Australia to help manage call centre volumes.
  • Bringing forward $500 million of capex from the second half of FY21 into calendar year 2020. This capital will be deployed to increase capacity in the network, including further accelerating the rollout of 5G and injecting much needed investment into the economy at this time.
  • Providing relief to small business and consumer customers unable to pay their bills by suspending late payment fees and disconnections until at least the end of April, at which point there will be a further review.
  • Extending any sponsorships expiring this year for another 12 months, providing more certainty to partners and the many causes Telstra supports.

The 2018 announcement said Telstra would effect a net reduction of 8000 employees and contractors by 2022 and reduce two to four layers of management, leading to the cutting of one in four executive and middle management roles.

“We are looking at every aspect of our business to see what we can do for our employees, customers,suppliers and the economy more broadly, while we maintain a focus on long-term value creation,” Penn said.

“The most important thing is that as many businesses as possible are still here when we get through this crisis.

“While it is critical we maintain a strong position we also believe there are a range of additional initiatives we can undertake now to help support the broader economy.”

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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