Telstra says to expect more job cuts

It'll make cuts, even if it doesn't know where from.

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

Despite being probed by retail shareholders at meetings earlier this week, Telstra's (ASX: TLS) senior management has said that its workforce will get smaller every year.

Yesterday morning chief operations officer Brendon Riley said, "overall, probably every year we will get a bit smaller … I don't know about indefinitely, but certainly for the next few years that will be the case."

When unions asked where the 1100 job cuts announced by the company earlier this week would come from, only 360 were accounted for. "We found out about 360 of the jobs," Community and Public Sector Union organiser Teresa Davison was quoted as saying in The Sydney Morning Herald. "But they couldn't give us any information on the 740."

Telstra boss David Thodey defended the company and said the cuts were part of a "business rebalancing" and that more jobs have been created than axed. It is expected that reduced spending will come from older, legacy business divisions such as landlines and 'transitioned' into the booming businesses like the NBN, defence contracts, international expansion and National Application Services.

Employees prepared for change

Over the past decade the total number of Australian-based employees has fallen dramatically, from 48,317 in 2001 to 38,663 at the start of 2013.

Australia's telecommunications market, including mobile and internet, has reached a 'saturation' point and the company is now shifting its focus to what opportunities it has left. The National Application Services and International divisions are the company's most rapidly growing, increasing revenue by 17.7% and 16.2%, respectively in the last year.

Foolish takeaway

Telstra has a market capitalisation of over $60 billion and is one of the biggest private employers in Australia. In order to increase shareholder value, management have one of two options: grow revenues or cost cut. Although the company has booming divisions, they are still small when compared to other parts of the company like mobiles, so the 'restructure' will be a driving factor in reducing costs and improving returns to shareholders in the next 12 months.

Every Aussie investor knows Telstra, but only the smart money is on the move now… 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!

More reading


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

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 »