Telstra to axe 170 jobs

Telstra's restructure takes aim at employees… again

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Telstra (ASX: TLS), Australia's biggest telecommunications provider is planning to offshore 170 staff to India despite reporting $1.6 billion in profit for the half year ended 31 December 2012.

This is not unusual for Telstra which back in February announced it would send 400 jobs to Asia for superior customer service. However, this move was the result of a handful of restructures and mergers of operational divisions that seek to combine its business into just five groups.

The job cuts are expected to be spread out across the country from the company's IT services business and the changes are likely to begin by October and take up to a year. Telstra has said it will help staff with the transitions but it has come as a shock to many.

The boss of Telstra's National Applications Services (NAS) business, David Burns, said the business was a growing area and that it has had "some success" in Asian markets. In the six months to 31 December 2012, the business grew by 10%.

The company is beginning to realise the potential in developing markets and seems to be shifting its focus away from domestic opportunities. Mr Burns said that the company will "need to expand our capability and support our growth in Asia".

The recent restructure and direction of the company to focus on customer service, rather than growth opportunities here in Australia, suggest that more jobs cuts may be in the pipeline.

Telstra is not the first major Australian company that has, this year, offshored jobs to focus on cutting costs and expanding into Asia. Last month, leaked ANZ (ASX: ANZ) memos described the possibility that up to 600 staff could be cut and offshored in a bid to focus on overseas expansion.

Foolish takeaway

Many large organisations reach a point where they must cut costs, make acquisitions or expand overseas if they are to continue impressing shareholders. Telstra is a great Australian company and its stock could arguably fit into any portfolio, the only question is how much of it do you hold.

In the market for high-yielding ASX shares? Get "3 Stocks for the Great Dividend Boom" in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading


Motley Fool contributor Owen Raszkiewicz owns shares in ANZ. 

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »