Australia's Telstra slashes jobs as 'tipping point' forces strategic reset

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.