Telstra boss Vicki Brady says consumers won’t feel impact of job cuts as Telco axes 2800 positions

Telstra boss Vicki Brady insists customers won’t feel any impact from a raft of job cuts the telco announced on Tuesday amid dwindling demand for fixed-line and corporate services.

Australia’s biggest telecommunications company will take the axe to about 9 per cent of its workforce, making an estimated 2800 positions redundant by the end of the year — a move described by unions as sudden. Almost 400 of those affected will be in consultation about their future immediately, Telstra said.

The decision is the result of a review that kicked off in February of its enterprise business, which focuses on providing technology and services to businesses and governments. Then, the company had achieved about $105 million in cost savings, while the job and service cuts detailed on Tuesday are expected to achieve $350m in savings.

Ms Brady said the $42 billion company she leads needed to cut the number of enterprise services it offered and offer a simplified approach to customer sales.

“I am confident we will come out the other side of this a more focused and successful company,” she said, adding that Telstra was struggling to meet cost-cutting ambitions due to inflation and other pressures.

“These changes to our product set are focused on big businesses and big organisations, and again, we will work with our customers as we transition them to a more modern set of products.”

Ms Brady added the jobs affected did not affect “our consumer customer service team”.

Telstra plans to detail progress on its job cuts and a full update on its enterprise review when it reports full-year financial results in August.

Among the cuts are to the cost base of its Telstra Purple tech services business, which last year acquired start-up Versent for $267m to scale up its broader business.

Telstra’s business-to-business and government divisions have been under pressure in recent years as more companies abandon fixed line telephone systems in favour of internet-based systems. Governments, too, have been looking for cost savings.

“NAS is clearly a long way from where we need it to be,” said Ms Brady in February of the network applications and services unit, which is part of the affected division.

The Communication Workers Union said Telstra’s announcement had come as a shock.

“There are going to be thousands of workers and their families terrified today about what this means for them and their future,” national assistant secretary James Perkins said.

“You can’t slash thousands of jobs without seriously impacting the delivery of services across the country.”

Treasurer Jim Chalmers said the news was distressing for affected workers, and the Government needed to ensure services did not suffer as a consequence of Telstra’s changes.

“We will be seeking advice from the ACCC about some of the claims that Telstra is making about their new pricing strategy and the role of the NBN,” he said.

“We want to make sure . . . that as our economy changes that we get better at adapting and adopting technology that our people are the big beneficiaries of those changes in our economy and in our technology base as well.”

For consumers, Telstra also announced it would update pricing on postpaid mobile plans, removing an annual price review that was linked to inflation.

Ms Brady said there would be no CPI-linked annual price changes to postpaid mobile plans in July, and any further updates on pricing would be communicated to customers.

Telstra’s mobiles division is performing well, with subscriber growth for the first four months of the year in line with expectations of the previous six months.