Wednesday, 29 May 2019 10:48

Telstra restructuring costs up as it brings forward job cuts Featured

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Telstra restructuring costs up as it brings forward job cuts Image by Gerd Altmann from Pixabay

Australia's biggest telco Telstra has brought forward its plans, announced last June, to sack thousands of workers, leading to an increase of $200 million in the company's restructuring costs for the current financial year.

Telstra said in June 2018 that it 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.

The company also said it would hire about 1500 new employees, meaning that the total purge would be 9500.

In a statement to the ASX on Wednesday, the telco said it expected to make a non-cash impairment and write down the value of legacy IT assets by about $500 million.

It said it had begun talks with employees and unions on proposed job cuts which were expected to be announced in the first half of the 2020 fiscal year, with the result that the restructuring costs would also be brought forward.

A reduction of about 6000 jobs is expected to be announced by the end of this financial year, bringing the total restructuring costs for the year to $800 million.

The remaining restructuring costs from the T22 move would be $350 million.

Telstra chief executive Andrew Penn said: "“We understand the significant impact on our people and the uncertainty created by these changes.

"We are doing everything we can to support our people through the change and this includes the up to $50 million we have committed to a transition program that provides a range of services to help people move into a new role.

"We expect to have announced or completed approximately 75% of our direct workforce role reductions by the end of FY19,”

He added that the company would continue to see job cuts as it replaced legacy systems, digitised and simplified work, and responded to 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.

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Sam Varghese

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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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