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Telstra to cut 1,100 jobs

Telstra (ASX: TLS) has issued a press release stating that 1,100 jobs will be cut by June 2014 as a result of the restructure it announced in May.

Chief Operations Officer Brendon Riley says the restructure is about ridding the company of duplicate roles. He also said that many employees suspected there would be cuts to the workforce: “at the time, we said we expected there to be impacts on jobs from these changes and, after reviewing the business over the last few months, today we briefed our people on the expected impacts”.

Although the company intends to deliver the news with “the utmost respect and sensitivity”, many will be disappointed, especially after the company recognised a $3.9 billion annual profit in the past 12 months.

The company said the cuts will equate to roughly 6% of the operations workforce but doesn’t include the 300-400 jobs that will be created in the National Application Services division stemming from the Telco’s contract with defence. “It is important to note that this figure does not include the large number of roles we expect to add to service some of our large NAS contracts, such as the 300-400 roles we need to add under our contract with Defence,” Mr Riley said.

The restructure will result in five separate divisions and despite the cuts Mr Riley says the operations team is focused on finding ways to make the business more streamlined and productive.

“Telstra is a changing business in a changing industry. We are seeing reductions of roles in declining businesses, due to evolving technologies and the restructuring of our industry, and growth in other areas such as NAS.”

These cuts follow from the Telco’s decision to cut 170 jobs in July. Telstra shares were flat in mid-afternoon trade.

How does this latest news affect Telstra’s prospects? Discover whether you should buy, sell or hold Telstra shares in our brand-new report, written by a top Motley Fool analyst. It’s free, click here for your instant download!

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Motley Fool contributor Owen Raskiewicz does not have a financial interest in any of the mentioned companies.

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