Telstra is cutting 8000 jobs as part of a massive restructure.
The job cuts follow a series of embarrassing service melt-downs in recent months.
Telstra said the job losses will affect employees, contractors and two to four layers of management.
The company said it was establishing a new-look Telstra with a standalone infrastructure business, InfraCo.
This business would “provide future optionality for a demerger or the entry of a strategic investor in a post-nbn rollout world”, Telstra said, signalling to the market that it sees a potential split of the company in the future.
Telstra said it is looking at a further $1 billion in cost cutting taking total cost reductions to $2.5 billion by the 2022 financial year.
“We are creating a new Telstra that is able to continue to lead the market. In the future our workforce will be a smaller, knowledge-based one with a structure and way of working that is agile enough to deal with rapid change. This means that some roles will no longer be required, some will change and there will also be new ones created,” Telstra CEO Andrew Penn said
“The rate and pace of change in our industry is increasingly driven by technological innovation and competition. In this environment traditional companies that do not respond are most at risk. We have worked hard preparing Telstra for this market dynamic while ensuring we did not act precipitously.
“However, we are now at a tipping point where we must act more boldly if we are to continue to be the nation’s leading telecommunications company.”
Testra shares dropped 14 cents, or 4.81 per cent to close at $2.77 as investors absorbed the news.
ACTU secretary Sally McManus said sacking 8000 was the wrong decision that betrayed staff and customers and warned it would damage the company in the long term.
“They have chosen to make 8000 people jobless, they have destabilised an entire workforce, they have chosen to deliver poorer service to their customers – they have chosen to put profits ahead of people, jobs and service,” Ms McManus said.
“Unless this decision is reversed, the company will end up paying the price, as their reputation disintegrates, their service and coverage erode and their standing as an iconic Australian company is irrevocably damaged.”