Telstra will slash up to nine per cent of its total workforce by the end of the year with about 2,800 people to lose their job.
Telstra CEO Vicki Brady made the shock announcement on Tuesday, claiming job cuts are necessary to ensure the company’s productivity.
The majority of cuts will be made by the end of 2024 and will focus on reducing non-labour and indirect labour costs.
This is expected to save the company about $350million by 2025.
‘Some of the proposed measures, which require consultation with employees and unions, would result in up to 2,800 job reductions from Telstra’s direct workforce,’ Ms Brady said in a statement to investors.
‘[The reductions would] make the investments needed to support the ever-increasing growth in data volumes on its network and deliver improved connectivity for customers across the country.’
Telstra CEO Vicki Brady announced the telco company would be cutting up to 2,800 jobs by the end of 2024
Ms Brady said Telstra employees will be supported through the changes by company staff and union representatives.
‘I appreciate the uncertainty proposed changes like this can create for our people and we will support them through this change with care and transparency,’ Ms Brady said.
‘As we propose specific changes, we will talk them through with our teams and union representatives first.’
Telstra currently has an estimated 31,000-strong workforce, according to its latest annual report.
The company has forecast a one-off restructuring cost of between $200million and $250million associated with the job cuts over the next two years.
The telco giant said its underlying earnings – before interest, depreciation, amortisation and tax – in 2025 was forecast between $8.4billion and $8.7billion.
Telstra has previously announced it will scale up its use of artificial intelligence.
In February, the telecommunications giant revealed it would expand two generative AI solutions which have been developed in-house.
The decision was made following ‘promising pilots with frontline team members, enabling faster and more successful interactions with customers’.
Telstra said the job cuts were necessary in improving the company productivity and would save some $350million by 2025
Macquarie Telecom Group Executive Luke Clifton told Daily Mail Australia Telstra’s job cuts was a ‘cheap, sinister move’ that would worsen the company’s that ‘already disgraceful customer service standards’.
Mr Clifton added the move to sack 2,800 staff would open the way for jobs to be replaced by artificial intelligence.
‘Telstra has never believed in investing in Australian people. It has outsourced staff overseas and now it’s trying to replace them with artificial intelligence,’ Mr Clifton said.
‘Rather than taking the lead on investing in AI to support staff and create better technologies for customers, the company is making a cheap, sinister move that will worsen its already disgraceful customer service standards.
‘Telstra doesn’t believe in its staff or its customers, no wonder both are leaving in droves.’
Consultation on 377 of the 2800 jobs will ‘begin immediately’.