Telstra has announced it aims to cut 2000 jobs by the end of the year to reduce costs, as the telecommunications giant struggles to make a profit in the national broadband network market.
The telco’s chief financial officer Vicky Brady confirmed the company is on track to axe 8000 staffs in its direct workforce as part of its T22 job-cutting program.
“By June, we expect to be more than 90 per cent through our T22 target to reduce our direct workforce by 8000 net roles, and to have completed that by the end of the calendar year,” she told the Macquarie Australia Conference.
The business has already cut 6000 staff across its direct workforce and 1600 across its indirect workforce in the interest of shareholder returns.
Telstra’s restructure were imposed as the company faces the NBN market “headwinds” from its rivals such as Vodafone and Optus while coping with financial difficulties during the pandemic.
While the move will slash thousands of Telstra employees, it is said to do little harm to Chief executive Andy Penn who” is set to take home about $4.5 million and Brady, who will also take home multimillion-dollar salary reports to Channel News.
Brady believed the T22 program would help the telco bolster its bottom line.
“2021 is an inflexion point for the financial performance of our business,” she said.
“Our continued focus on T22 is delivering simpler, better outcomes for our customers and greater productivity, enabling us to increase our cost out targets.”
“Product margin improvement is also imminent and already occurring in mobile,” Brady added.
The telecommunication giant also plans to shed customer service jobs while enhancing the virtual assistant Codi, which customers have slammed as time-wasting for failing to understand even simple requests.
@Telstra your live operator virtual assistant is hopeless.. been trying for half an hour to get through to an actual operator.. please fix it
— Nafe 🌐 (@nafebrown) February 14, 2018
Wow @telstra “Codi” is such a complete and utter waste of my time. New service: throwing SIM in the bin and going elsewhere. Hopeless.
— b1 (@ledbyexample) March 1, 2018
The company admitted that customers prefer human agents to artificial intelligence but said the routing bot had become more sophisticated.
“Our aspiration has been to reduce the number of calls to our call centres by two-thirds by FY22,” Brady said.
“With the acceleration to digital, we are already at this run rate more than a year before the end of the strategy. That means that over time, we will need smaller call centres for these customers, and more will work from home.”
Brady also emphasised Telstra’s “ambitions” to boost growth in earnings before interest, tax, depreciation, and amortisation—the process of gradually writing off the initial cost of an asset—to “mid to high single-digit” in the next financial year, following a drop of 14.2 per cent in the second half of 2020.
“We see clear positive indicators of an improved financial trajectory,” Brady said.
She noted the Telco expected to be on the path to achieving their 2023 financial ambitions.
The announcement came two days after Telstra faced a record fine of more than $1.5 million for not letting consumers transfer their existing mobile numbers to another network.