Telstra commences first round of job cuts with 1200 roles gone

Telstra has commenced the first round of jobs cuts that will eventually see up to 8000 slashes across the business as part of its multi-year organisational restructure.

In a letter to employees sighted by CRN, Telstra chief executive Andy Penn said a net 1200 roles would be cut as part of the first major phase of its new business structure. A Telstra spokesperson confirmed these job cuts were part of the net 8000 reductions already announced.

Affected employees were informed yesterday if their role had been cut. Penn said the extent of the changes would vary by function, but would mostly come from management, corporate units and back of house functions.

“This will minimise the impact on our front of house teams and ensure that we maintain focus on the customer experience,” Penn said.

“I understand that today is a difficult day for everyone at Telstra, especially those whose roles are impacted by these proposals.”

The telco announced its Telstra2022 strategy in June, which aims to simplify the company's organisational structure and reduce costs in an effort turn around the company’s disappointing financial performance and plug a $3 billion earnings hole.

“These are not decisions we take lightly. As I have said previously, we are embarking on significant change to compete for and win customers,” Penn wrote.

“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.”

Penn also gave some insight into how Telstra’s organisational structure would look in the future, saying that the company would shift to a functional structure where the accountability of each business unit would be more clearly defined.

All nine business units will work with common processes to address issues such as duplication, silos and competing priorities across different functions, as well as incorporating collaboration into its processes.

Penn said that Telstra would be able to eliminate between two and four layers of management by increasing the average span of responsibility for leaders to help flatten the organisation. In total, Telstra plans to remove 25 percent of management in order to remove layers of process.

Telstra will announce another round of changes at the end of September.