TELSTRA TO AXE 8000 WORKERS

TELSTRA has been accused of putting profits ahead of service after it announced the axing of 8000 jobs — almost a quarter of its workforce — in a $1 billion shake-up of its operations.

The Communications Workers Union, which represents staff at Australia’s largest telco, says the cuts will impact Telstra’s ability to service clients, particularly those in regional areas.

National president Shane Murphy says the decision will devastate thousands of families and compromise its ability to deliver services.

“In an industry which is booming, Telstra has clearly chosen to prioritise shortterm profits to keep shareholders happy,” Mr Murphy said yesterday.

“This is a recipe for reduced services, with Telstra’s highly skilled workforce of employees and contractors replaced by casuals and piece-workers.”

Telstra shares were down more than 7 per cent in early trade, with the stock touching $2.70 — its lowest since 2011 — before closing 4.8 per cent lower at $2.77.

The telecommunications giant, which had targeted $1.5 billion in savings, says one in four executive and middle management positions will go as it cuts 8000 employees and contractors over three years.

The company has committed $50 million towards various aspects of the redundancies, which come after a year of regular service outages.

Treasurer Scott Morrison said it would be an anxious time for workers and their families, but the Government was doing its best to ensure there were other jobs to go to.

Mr Morrison said there were “bright prospects” in the telecommunications industry “but it still will be hard and it still will be an anxious time”.

The cuts come less than a month after Telstra warned its 2017-18 earnings would likely be at the bottom of its guidance of $10.1 billion to $10.6 billion, blaming increasing competition and rising costs from the NBN.

Telstra chief executive Andrew Penn said the strategy would eliminate “pain points” for customers, following several outages.

“We are now at a tipping point where we must act more boldly if we are able to continue to be the nation’s leading telecommunications company,” Mr Penn said.

“We will take a bolder stance and use the disruption in the industry to lead the market for the benefit of our customers, employees and shareholders.

“The rate and pace of change is increasingly driven by technological innovation and competition.”