Australian telecom giant Telstra to axe 8,000 jobs

Telstra CEO Andrew Pen

Telstra CEO Andrew Pen

It's expected that the bulk of the jobs lost will come from middle management, with one in four executive roles to be lost.

They had partially recovered since, but took another hit on Wednesday, closing 4.81 per cent lower to Aus$2.77.

Mr Penn said the telecommunications sector had never been under more pressure, with the development of the NBN, significant increased competition, and huge pressure to invest in new technologies.

"We are now at a tipping point where we must act more boldly if we are to continue to be the nation's leading communications company".

Chief executive Andy Penn said the telecom giant plans to shed about 8,000 jobs - a quarter of its workforce - over the next three years.

The company employs 32,000 people across 20 countries, according to its most recent annual report. "In this environment, traditional companies that do not respond are most at risk".

"That is indeed true for all Australian businesses, which is one of the reasons why we will continue to work hard to secure the passage of our company tax cuts".

Prime Minister Malcolm Turnbull spoke to Telstra boss Andy Penn on Tuesday night about the job cuts and the transition funding.

Despite the massive cost-cutting, Telstra insists that it will remain a "premium" telecommunications brand and lead in the roll-out of 5G mobile networks.

Called Telstra InfraCo, it will comprise fixed-network infrastructure including data centres, non-mobiles related domestic fibre, global subsea cables, exchanges, poles, ducts and pipes.

As part one of the four pillars of its "Telstra2022" strategy, the telco shared more details with shareholders about how the new infrastructure business, Telstra InfraCo will operate.

Among the plans is a the creation of "InfraCo" a "wholly owned infrastructure business unit" Telstra says will "drive performance and provide future optionality for a demerger or the entry of a strategic investor in a post-NBN rollout world".

Telstra, Australia's former telecommunications monopoly, is also planning to split its infrastructure operations, which include data centers and broadband cables, into a separate unit and will drastically slim down the number of products it offers customers.

"By putting our fixed assets together in a single BU we are establishing the right structure to give greater focus on this part of Telstra's business".

The company sees Ebitda of between A$8.7 billion and A$9.4 billion in fiscal 2019, excluding restructuring costs of about A$600 million.

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