The Motley Fool

Telstra’s plan to dial up the pain just sent its shares to a 52-week high

Telstra Corporation Ltd (ASX: TLS) shares are a favourite of SMSF investors in or near the retirement stage and professional fund managers running ‘income funds’ due to Telstra’s big dividend yield. In fact the share price hit a 52-week high of $3.68 this morning on the back of news it might be dialling up more pain for some of its unfortunate employees.

So investors may be turning increasingly bullish on the stock on news reports that the company has a plan to now lay off up to 10,000 workers to help boost its bottom line.

Telstra itself has reported that it plans to lay off around 8,000 workers over the next 3 years as the telco is looking to significantly reduce costs as part of its T22 simplification strategy.

The formerly government-owned giant telco probably has plenty of room to cut costs, so the mooted plan to cut up to 10,000 staff may turn out accurate. 

While the cost-savings may prove beneficial to Telstra’s profits and share price over the short term, the long-term challenge for the business remains finding ways to replace the permanently lost revenues and earnings from the NBN transition.

Others struggling on the back of the NBN in the telco space include TPG Telecom Ltd (ASX: TPM) and Vocus Group Ltd (ASX: VOC).

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

Motley Fool contributor Tom Richardson owns shares of TPG Telecom Limited.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Related Articles...

Latest posts by Tom Richardson (see all)