Australia’s Largest Telco Announces Hundreds of Job Cuts

A Telstra logo is seen outside the Telstra Melbourne headquarters on June 14, 2017 in Melbourne, Australia. (Michael Dodge/Getty Images)

Australian telco giant Telstra has started a new round of job cuts as the company progresses with its cost-saving strategy to remain competitive in the market.

On July 20, Telstra said the latest changes within the company had resulted in “a net reduction of around 472 jobs.”

Most of the lost positions were reported to be in the enterprise workforce.

“Decisions like this are always difficult. We know and feel the personal impact on our people and their families,” a Telstra spokesman said in a statement.

“They are critical for us to remain competitive and achieve our customer ambitions.”

Nevertheless, the spokesman stated that there would be no job redundancy in customer service, including the workforce that serves customers at Telstra stores or provide assistance over the phone or at home.

Telstra shop in Rundle Mall services a customer in Adelaide, Australia, on July 21, 2021. (Kelly Barnes/Getty Images)

Telstra’s latest move followed the 1,425 job cuts announced in 2021 and was part of a strategic plan to save $500 million (US$341 million) in operation costs.

Under the plan, the company aimed to achieve a 5G coverage of 95 percent of the population by 2025, with 80 percent of all Telstra’s mobile traffic to be on 5G by that time.

Recently, the company signed an agreement with Elon Musk’s satellite internet service Starlink to provide voice-only and voice-plus broadband services to rural and remote customers in Australia.

The company expects to launch the service in late 2023, with pricing to be announced.

Australia’s Unemployment Rate Remains at 3.5 Percent

Telstra’s announcement comes as Australia reported no change in the unemployment rate in June.

According to the Australian Bureau of Statistics (ABS), the jobless rate remained stable at 3.5 percent in June, in line with May figures.

Around 32,600 people found employment in the month, while the number of unemployed fell by 11,000.

In addition, the participation rate dipped by 0.1 percentage points to 66.8 percent.

“The rise in employment in June saw the employment-to-population ratio remain at a record high 64.5 percent, reflecting a tight labour market in which employment has recently increased in line with population growth,” ABS head of labour statistics Bjorn Jarvis said.

Mr. Jarvis also noted that over a million more Australians had found a job compared to before the COVID-19 pandemic, while a much higher share of the population was now employed.

“In June 2023, 64.5 percent of people 15 years or older were employed, an increase of 2.1 percentage points since March 2020,” he said.

While an increase in employment is good news for many Australians, economists were concerned that a strong labour market would add pressure on inflation and complicate the Reserve Bank’s job to curb price growth.

“The Reserve Bank is not in a position where it can tolerate any upside surprises to the inflation outlook, and we expect to see two more rate hikes in the coming months,” Oxford Economics Australia head of macroeconomic forecasting Sean Langcake said.