Telstra share price climbs amid major job cuts

This week's job cuts are part of Telstra's strategy to deliver $500 million of net cost reductions.

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The Telstra Group Ltd (ASX: TLS) share price is in the green today.

Shares in the S&P/ASX 200 Index (ASX: XJO) telco closed yesterday trading for $4.21. At the time of writing shares are changing hands for $4.22, up 0.2%.

This comes amid news of a significant round of job cuts at the company.

What's happening with the job reductions?

The Telstra share price is in the green as ASX 200 investors consider the implications of the company cutting 472 positions across its enterprise unit.

Commenting on the cost-cutting measure, a Telstra spokesman said (courtesy of The Australian):

I can confirm we have proposed some changes to continue to reshape our business so that we remain competitive, efficient as well as effective in the way we work.

Potentially offering some support to the Telstra share price, the spokesman stressed that "there won't be any reductions to our Telstra consumer teams who serve our customers in store, on the phone or at home".

The job cuts are part of the telco's strategy to deliver $500 million of net cost reductions under its T25 strategic plan. That plan was initially announced in September 2021 under then-CEO Andrew Penn.

T25 continues apace under his replacement, Vicki Brady.

"We have retained our ambition on the $500 million net cost out target under T25," Brady said in February.

At the time she noted the big lift in inflation since the cost reduction target was originally proposed.

"When we first set that target, inflation was at a very different level. So it is a much bolder target now," she said.

Atop this week's staffing reductions, the Telstra spokesman said the company has proposed changes under T25 to gain "efficiencies from increased digitisation, automation and new technology".

He said the moves "are critical for us to remain competitive and achieve our customer ambitions".

Telstra share price snapshot

The Telstra share price has outpaced the benchmark in 2023, gaining 6.9%. The ASX 200 is up 5.7% year to date.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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