Telstra sacks nearly 500 staff in major cost cutting

The telco is slashing about 500 roles, its first major round of job cuts under chief executive Vicki Brady, as it tries to save $500m.

The company has around 30,000 employees nationally. Picture: NCA NewsWire / Luis Enrique Ascui

Telstra has axed nearly 500 roles, its first major round of job cuts under chief executive Vicki Brady, with the telco shedding staff across its enterprise unit.

The company told affected workers on Wednesday, with most of the 472 affected roles understood to be in the telco’s enterprise workforce.

The cuts form part of Telstra’s bid to slash $500m in fixed costs under its T25 strategic plan, which was first initiated by former chief executive Andy Penn and has continued under Ms Brady’s stewardship.

“I can confirm we have proposed some changes to continue to reshape our business so that we remain competitive, efficient as well as effective in the way we work,” a Telstra spokesman told The Australian.

“We should make it clear that there won’t be any reductions to our Telstra consumer teams who serve our customers in store, on the phone or at home.

“More broadly across our business we’ve proposed changes to address impacts from exiting legacy products and services as well as gaining efficiencies from increased digitisation, automation and new technology. These are critical for us to remain competitive and achieve our customer ambitions.

“If the change proceeds it will see some of our people leave the organisation and the creation of new roles, with a net reduction of around 472 jobs.

“Decisions like this are always difficult. We know and feel the personal impact on our people and their families.”

Telstra CEO Vicki Brady. Picture: Sam Ruttyn

It’s understood affected workers will gain access to redundancy packages and support services. The company has around 30,000 employees nationally.

Telstra’s T25 strategy, which includes $500m in cost savings, follows the telcos T22 strategy in which it announced $2.5bn in annual cost savings and a reduction of 8000 jobs over four years. Ms Brady recommitted to Telstra’s plan to find $500m in cost savings on a earnings call with investors and analysts on an earnings call in February.

“We have retained our ambition on the $500m net cost out target under T25,” Ms Brady said. ”We’re very much aware that … When we first set that target, inflation was at a very different level. So it is a much bolder target now. But I’ll be perfectly honest, we did not think in this environment, that taking the foot off cost out was the right move. So we are absolutely focused on that ambition.

“T25 is a strategy that leverages the foundation and capabilities we have built over the last few years. I am absolutely confident it is the right strategy. But naturally, it may be necessary to make adjustments to it at times to deliver customer experience improvements, new growth opportunities, and fundamentally shift the way Australians feel about us.”

It follows a move by NBN Co to axe 500 roles in February – about 10 per cent of its workforce — joining a growing list of companies hit by the global “tech wreck”.

Market analyst Josh Gilbert, from investment outfit eToro, said the cuts were a sign Ms Brady is focused on efficiency in a bid to boost profitability.

“It’s been a year of efficiency for many companies as inflation dampens profitability, but Ms Brady is intent on delivering for investors after a strong set of first-half results, which saw a higher dividend,” he said.

“Although this form of cost-cutting is difficult, it‘s often rewarded by markets. Investors are known to welcome cost-cutting and thinner payrolls, which has been seen on Wall Street with companies such as Meta. Disciplined cost management from Telstra could hold the key to growing earnings further.”

Telstra shares last traded up slightly at $4.23.