Australia’s largest telco has announced that it will be axing 8,000 jobs amid a restructure program labelled “Telstra2022”, along with a reduction of “2-4 layers of management”.
Announced at Telstra’s Strategy Day on Wednesday morning, Telstra will also create a new infrastructure business unit, called InfraCo, which it said would “drive performance and provide future optionality for a demerger or the entry of a strategic investor in a post-NBN rollout world”.
Restructuring costs are expected to reach AU$600 million for FY19, with an earnings before interest, tax, depreciation, and amortisation (EBITDA) guidance of between AU$8.7 billion and AU$9.4 billion by then.
Its productivity program will be increased by an additional AU$1 billion to reach AU$2.5 billion by 2022, with the telco saying it still remains on track to “lead and win in 5G” mobile connectivity.
“The rate and pace of change in our industry is increasingly driven by technological innovation and competition … 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,” Telstra CEO Andy Penn said in a statement to the ASX.
“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 is 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.”