Australia's Telstra to cut 2,800 jobs by year's end to cut costs, ET Telecom

FILE PHOTO: A public telephone booth bearing the logo of Telstra Corp Ltd, Australia's largest telecommunications company, stands outside the Cooladdi Post Office and motel, located in the town of Cooladdi in south-west Queensland, Australia, August 14, 2017. REUTERS/David Gray /File Photo

Australian telecom company Telstra said on Tuesday it would cut up to 2,800 jobs from its direct workforce by the end of this year, as part of proposed measures to simplify operations and reduce costs.

Consultation on 377 of these roles would begin immediately, mainly from areas that support the products and services that will be abandoned in the business operations, Telstra said.

The company expects one-off restructuring costs of A$200 million ($133.36 million) to A$250 million in fiscal 2024 and 2025.

Telstra reiterated its 2024 earnings forecast and said it expects 2025 underlying earnings before interest, taxes, depreciation and amortization to be between A$8.4 billion and $8.7 billion.

Telstra had first announced a review of its products and services under its enterprise business in February.

It said on Tuesday it had identified a number of actions as part of the review, including streamlining its product portfolio and reducing network applications and services products in the market by almost two-thirds.

Telstra said it would update the customer terms and conditions for its postpaid mobile plans to remove the annual CPI-related price review.

“This approach reflects that there are a range of factors that play a role in every pricing decision, and will provide greater flexibility to adjust prices at different times and across different plans based on their value propositions and customer needs,” said CEO Vicki Brady.

Analysts at UBS said the removal of the CPI indexation clause in mobile postpaid plans was a “major surprise”, adding that the forecast for fiscal 2023 suggests the company expects mobile businesses to remain a growth driver.

The company's shares fell as much as 2.7%, posting their biggest intraday decline in more than three months.