Telstra 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.
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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.