Australia’s Telstra slashes jobs as ‘tipping point’ forces strategic reset

Australia’s Telstra slashes jobs as ‘tipping point’ forces strategic reset

Australia’s Telstra slashes jobs as ‘tipping point’ forces strategic reset

Written by Reuters

20 Jun, 2018 | 11:57 am

REUTERS – Australia’s largest telecom firm Telstra Corp Ltd said it would cut a quarter of its workforce and flagged asset sales today (June 20), as competition and new technology crush its mainstay fixed-line businesses and force a strategic reset.

It will shed 8,000 employees and contractors from a workforce of 32,000 to save A$1 billion ($738 million), drop underperforming products and separate assets it values at A$11 billion from the rest of the firm.

It also flagged a fall in 2019 earnings to between A$8.7 billion and A$9.4 billion, excluding restructuring costs of about A$600 million, having already warned in May that 2018 earnings would be at the bottom end of its guidance.

Telstra shares dropped 6.2% in early trade to their lowest in seven years, while the broader market rose 0.7%.

Telstra dominates Australia’s mobile telephone and broadband markets but like incumbent telecom firms around the world, profits from traditional fixed-line networks are shrinking and it is under immense pressure to address a sliding share price.


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