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Telstra to slash 8,000 jobs in overhaul

Simone Ziaziaris  |  20 Jun 2018Text size  Decrease  Increase  |  
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Sydney [AAP] - Telstra (ASX: TLS) is slashing 8,000 jobs and splitting its mobile and infrastructure operations into separate businesses as it aims to cut an additional $1 billion of costs by 2022.

The telecommunications giant, which had already targeted $1.5 billion in savings, says one in four executive and middle management positions will go as it cuts 8,000 employees and contractors over the next three years.

Telstra chief executive Andy Penn says an "agile" structure is needed to deal for the company, which last month warned investors about the impact of mobile competition and rising NBN costs, to deal with rapid technological innovation.

"I am acutely conscious the impact the loss of jobs has on our people and society," Mr Penn said in a presentation he will give at a strategy briefing on Wednesday.

"But I need to be up front and transparent about the scale of the change needed at Telstra and what this means."

The cuts come less than a month after Telstra warned its 2017/18 earnings will likely be at the bottom of its guidance range of $10.1 billion to $10.6 billion, blaming increasing competition in mobile and fixed broadband, and rising costs from the national broadband network.

Telstra on Wednesday maintained that guidance for FY18 and forecast a fall in earnings for 2019 to between $8.7 billion and $9.4 billion - excluding restructuring costs of about $600 million.

The company said it will establish a stand alone $11 billion infrastructure unit, dubbed InfraCo, from July 1 which will have its own chief executive reporting to Mr Penn and help drive performance and set up investment options after the NBN rollout.

 

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© 2020 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

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