Australian telecom giant Telstra announced plans to eliminate 2,800 jobs as part of a significant reorganisation aimed at revitalising its enterprise division. The company has been conducting a thorough review of Telstra Enterprise since February, responding to economic pressures that have impacted its corporate clientele.
The reorganisation focuses on three key strategies: streamlining the network applications and services (NAS) portfolio, simplifying the customer sales and service model, and reducing costs within Telstra Purple, its digital transformation consultancy. The NAS portfolio will see a reduction of nearly two-thirds of its product offerings, while the cost cuts at Telstra Purple aim to align expenses more closely with revenue and adapt to market shifts.
Telstra’s enterprise division has struggled recently, with a 67% year-on-year drop in EBITDA and a 3% decline in revenue, primarily due to the NAS business. CEO Vicki Brady highlighted the company’s commitment to infrastructure, technology, and customer service as essential to driving growth and supporting Australia’s digital economy, despite the challenging environment marked by competitive pressures, technological advancements, changing customer needs, and inflation.
In addition to the enterprise overhaul, Telstra will dismantle its Global Business Services unit, which was established in 2019 to centralise back-office functions. These responsibilities will now be redistributed throughout the company to streamline processes and enhance decision-making at the customer-facing level.
The job cuts will affect around 9% of Telstra’s 31,000 employees, with immediate consultations on 377 roles. Brady acknowledged the uncertainty this creates for employees and emphasized the company’s commitment to supporting them through the transition.
Telstra expects the reorganisation to save A$350 million ($233.4 million) by the end of fiscal 2025, though it will incur one-off restructuring charges of A$200 million to A$250 million over the current and next fiscal years. The company reaffirmed its full-year 2024 EBITDA guidance of A$8.2 billion to A$8.3 billion and projected EBITDA of A$8.4 billion to A$8.7 billion for fiscal 2025.
Additionally, Telstra will discontinue the annual consumer price index-linked price reviews for its postpaid mobile plans, opting for a more flexible pricing strategy based on value propositions and customer needs.
