Telstra, Australia’s largest telecommunications company, has announced plans to cut up to 2800 jobs by the end of 2024.
This decision is part of the company’s broader strategy to streamline operations and reduce costs amidst increasing competition and the need for digital transformation.
Telstra CEO Vicki Brady announced on Tuesday that the company plans to eliminate up to 2800 jobs by the end of 2024, a move aimed at increasing productivity and saving an estimated $350 million.
The T25 Strategic Plan
The Telstra job cuts are a significant part of the T25 strategic plan, which aims to save approximately $500 million by 2025.
This plan follows the T22 initiative, which saw the elimination of around 8,000 jobs over four years, achieving cost savings of about $2.5 billion.
The T25 plan, under the leadership of CEO Vicki Brady, aims to build on these efforts by further optimizing the company’s operational efficiency through increased digitalization and automation.
Impact on the Workforce
Telstra will primarily cut jobs from its enterprise workforce, resulting in a net reduction of 472 jobs after factoring in new roles created through restructuring.
The company assures that customer-facing roles in retail and customer service will remain unaffected.
Telstra aims to utilize automation and new technology to improve efficiency and reduce reliance on manual processes in specific areas.
Reasons for the Job Cuts
Several factors have driven Telstra to undertake these job cuts:
- Cost Reduction: With rising operational costs and a competitive market, reducing expenses is crucial for maintaining profitability.
- Digital Transformation: The shift towards digital services necessitates fewer manual roles, especially with the increased use of automation and digital tools.
- Market Competition: The telecom sector in Australia is highly competitive, and maintaining a lean and efficient operation is vital for staying ahead.
Broader Industry Context
Telstra is not alone in making significant workforce reductions.
Earlier this year, NBN Co, the state-run broadband provider, announced plans to cut 500 jobs due to similar pressures of rising costs and market competition.
These cuts reflect a broader trend within the telecommunications industry, where companies are increasingly leveraging technology to streamline operations and cut costs.
Telstra have also not hidden their desire to embrace AI technology to streamline operations, which will no doubt leave many out of the job in the telco sector.
Support for Affected Employees
Telstra has committed to supporting affected employees through the transition.
This includes efforts to find alternative roles within the company where possible, offering redundancy payouts, and providing support services to assist with job placement and career transitions.
The company acknowledges the personal impact of these decisions on its employees and their families and aims to handle the reductions as compassionately as possible.
Future Outlook
Despite the challenges, Telstra remains optimistic about its future. Their T25 plan is expected to position Telstra better for long-term success by creating a more agile and efficient organization.
With the huge focus on digital transformation and cost efficiency is anticipated to enhance Telstra’s ability to compete in a rapidly evolving market landscape full of competition.
As Telstra shares are at a 1 year low, the company is looking for more ways to streamline operations and reduces costs.
Conclusion
The decision to cut up to 2800 jobs is a difficult step for Telstra as it navigates the challenges of the modern telecommunications landscape.
By focusing on digital transformation and operational efficiency, Telstra aims to remain competitive and continue to serve its customers effectively.
That said, the telco giant will continue to face public backlash due to a large number of workers now out of roles, and the recent price raises, raising the question around Telstra’s future direction.
