The nation’s largest telecommunications operator has announced a major restructure that will result in the axing of 8,000 jobs, including many contractor positions.
Telstra made the announcement as part of plans to slash $2.5 billion from its operating costs by the 2022 financial year.
In a statement issued this morning, Telstra unveiled a “radical transformation” of its operations, centred on four key areas:
- Product simplification and enhancement of consumer experience
- Structural simplification
- Cost reduction push
- The establishment of a new standalone infrastructure business
“The rate and pace of change in our industry is increasingly driven by technological innovation and competition. In this environment, traditional companies that do not respond are most at risk,” said Telstra CEO Andrew Penn.
“The Australian telco market is entering an extremely challenging period driven by a number of factors including the nbn transition and increased mobile competition. We are seeing this play out in our financial performance and therefore the impact on the economics of the company are very significant.
“We have worked hard preparing Telstra for this market dynamic while ensuring we did not act precipitously. However, we are now at a tipping point where we must act more boldly if we are to continue to be the nation’s leading telecommunications company.”
Jobs on the chopping block
That tipping point, Mr Penn claimed, is behind the company’s decision to slash 8,000 jobs over the next four years, which will include a mixture of employees and contractors.
Middle management was singled out by the razor gang, with one in four executive and middle management roles to be scrapped: the equivalent of between two and four layers of management company-wide.
Telstra is hoping that other reforms to its product offering will also reduce the volume of customer service calls by one-third, presumably leading to a reduction in call centre staff.
“We are creating a new Telstra that is able to continue to lead the market. In the future, our workforce will be a smaller, knowledge-based one with a structure and way of working that [are] agile enough to deal with rapid change. This means that some roles will no longer be required, some will change and there will also be new ones created,” said Mr Penn.
“We understand the impact this will have on our employees and once we make decisions on specific changes, we are committed to talking to impacted staff first and ensuring we support them through this period.”
Shake-up of business plans
SMEs and individual customers are being promised an easier ride once the changes are rolled out.
The company said that as part of its product simplification drive, the number of consumer and small business plans will drop from a staggering 1,800 to just 20.
All consumer and small business products, as well as half of enterprise plans, will be migrated to “completely new technology stacks”, leaving legacy systems behind.
“Customers will have more choice than ever in a post-nbn world with increasing mobile competition. We are committed to leading the market in a period of transition and positioning ourselves to create a strong platform for growth,” Mr Penn said.
“At its core, this strategy is about placing customers at the centre of everything we do and delivering simpler, more flexible products with a beautiful digital service experience.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.