Telstra executives in firing line

The first wave of job cuts under Telstra’s strategic overhaul looks set to claim heavyweight scalps.

Telstra CFO Warwick Bray. Picture: Aaron Francis

telecoms: The first wave of job cuts under Telstra’s strategic overhaul looks set to claim heavyweight scalps, with chief financial officer Warwick Bray and technology strategy head Stephen Elop in the firing line.

Telstra will announce cuts to its senior leadership team as early as Monday, as part of its Telstra 2022 strategic overhaul announced in June.

An industry source told The Weekend Australian both Mr Bray and Mr Elop’s positions were under threat. Telstra declined to comment.

The telco is already looking for a replacement for its networks boss Mike Wright, who announced his retirement earlier this month and the loss of Mr Bray and Mr Elop would result in a significant makeover of Telstra’s top brass.

Telstra will shed as many as 9500 jobs over the next three years and split its infrastructure and mobile business, as it moves to slash an additional $1 billion of costs by 2022.

The flagged job cuts will make an appreciable dent in Telstra’s total workforce of 32,000 and the telco suggested last month executive and management roles would bear the brunt of the move.

The incumbent telco, which has forecast its fiscal 2019 earnings to fall between $8.7bn and $9.4bn, is under intense pressure to stabilise its business, with its shares hovering near a seven-year low of $2.76.

With the National Broadband Network (NBN) denting its books to the tune on $3bn annually and the entry of TPG Telecom likely to put pressure on mobile margins, Telstra is betting on its new strategic road map to arrest the ongoing decline in value. Under chief executive Andrew Penn’s tenure, which started in May 2015, Telstra has lost more than $40bn market value and the past couple of years have also seen the telco’s networks succumb to high-profile service outages.

The latest nationwide outage in May left millions of customers stranded without a service, with Telstra pointing the finger at a series of software faults. Telstra is investing up to $5bn into its networks over the three years to June 30, 2019 to increase capacity and prepare them for 5G services.

Mr Bray joined Telstra as head of corporate strategy in 2009, and became chief financial officer in April 2015 when then-CFO Andy Penn took the top job. He was potentially in line to succeed Mr Penn.

He served as chairman of the Australian Mobile Telecommunications Association from 2012 to 2014 and was also a director of Telstra’s former Hong Kong mobile subsidiary, CSL, from 2012 to 2014.

Meanwhile, Mr Elop, the former CEO of Nokia and a senior executive at Microsoft, joined Telstra in March 2016 in the newly created role of group executive technology, innovation and strategy.

The role was designed to deliver more firepower to Telstra’s management team as it embarked on its goals to become a technology company.

Speaking to The Australian soon after his appointment, Mr Elop said his key job was to centralise Telstra’s technology initiatives.