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BREAKING NEWS: Telstra To Be Broken Up 8000 Employees Face The Chop

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Today is D Day for Telstra with some observers calling for the sacking of CEO Andy Penn who is expected to announce a massive slashing of up to 8,000 jobs and the breakout of Telstra’s infrastructure assets into a separate entity.

During the past month Telstra spin doctors having been working overtime defending or trying to explain a serious of national network crashes that have seen home broadband networks bought to a standstill and consumers left without mobile connectivity because of failure across Telstra 4G and 3G networks.

At a briefing tomorrow Penn is set to roll out a plan called Telstra2022 it will include the sale of $2 billion of assets, 8000 job cuts – including one in four middle-management roles. He will also attempt to slash an additional $1Billion in costs in an effort to deliver over $2.5 billion in savings.

Penn who has failed to grow Telstra’s market share since his appointment has surrounded himself with PR advisors that have seen him spruiking technology that is nowhere near being a reality in Australia and could never be part of Telstra’s offering in the future due to the cuts being implemented.

 

In a heads up to the thousands of staff who could be sacked as part of Penn’s new vision he said recently “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,” Mr Penn said.

“We understand the impact this will have on our employees and once we make decisions on specific changes, we are committed to talking to impacted staff first and ensuring we support them through this period.”

Telstra has been investing an extra $3 billion of capital expenditure on its networks and investors have been keen to hear where that money has gone and what benefits it will give the telco.

Telstra2022 strategy will have four key pillars; The retail offering will be reduced from 1800 consumer and small business plans to 20 simple core plans.

Telstra infrastructure will go into a new $11 billion-dollar division called InfraCo. This operation will consist of fixed networks, data centres, fibre, copper, hybrid fibre coaxial and subsea cables, exchanges, poles, ducts and pipes. It will have a workforce of about 3000.

“The Australian telco market is entering an extremely challenging period driven by a number of factors including the nbn transition and increased mobile competition. We are seeing this play out in our financial performance and therefore the impact on the economics of the company are very significant.,” Mr Penn said.

Back in May Penn announced that FY18 earnings will be at or around the bottom end of guidance.

He said recently that he expects the trends to continue in to FY19 as the Company struggles in the broadband and mobile markets.

He claims that in FY19 the market will decline 2 to 3 per cent in mobile and fixed revenue.”

Telstra is expecting income of between $26.6 billion and $28.5 billion, its EBITDA to be between $8.7 billion and $9.4 billion.

“Customers will have more choice than ever in a post-nbn world with increasing mobile competition. We are committed to leading the market in a period of transition and positioning ourselves to create a strong platform for growth,” Mr Penn said.

“At its core, this strategy is about placing customers at the centre of everything we do and delivering simpler, more flexible products with a beautiful digital service experience.”

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