Connect with us

Jobs

Australia: Telstra slashes 2,800 jobs in latest profit-driven restructuring

Published

on

Australia’s largest telecommunications provider, Telstra, announced Tuesday that 2,800 jobs—9 percent of the workforce—would be slashed by the end of the year.

The first to go, in July, will be 377 workers in the company’s enterprise division, where 472 positions were already slashed last year, but the restructuring operation will destroy jobs throughout the organisation.

The sackings, along with other cost reduction measures, are expected to cut $350 million in yearly expenditure. This falls short of the company’s T25 restructuring target of $500 million in annual cost savings, leaving open the possibility of further cuts in the first half of next year.

Telstra store in Chadstone Shopping Centre, Victoria. [Photo by Wpcpey / CC BY-SA 4.0]

Telstra’s is the largest job cut announcement by an Australian company so far this year, but takes place in the context of a broader attack on working-class jobs and wages. This was reflected in an increase in the official unemployment rate to 4.1 percent last month, up from 3.9 percent in March.

Professor John Buchanan, from the University of Sydney’s business school warned that Telstra’s job cuts are a sign that “cracks” in the jobs market are becoming “more evident.”

Federal Labor Treasurer Jim Chalmers feigned concern over the cuts, declaring that Tuesday was “a very distressing day” for Telstra workers and their families. But the reality is that the company is carrying out the explicit policy of Labor and the Reserve Bank of Australia, which is to drive up unemployment in order to suppress workers’ demand for increased wages.

The latest cuts were announced by Telstra CEO Vicki Brady in a market update call on Tuesday. Brady said the “reset” of the enterprise unit was prompted by that division’s 66.7 percent drop in EBITDA (earnings before interest, taxes, depreciation and amortisation).

However, the company as a whole was on track to meet previous EBITDA expectations of around $8.3 billion in 2023–2024, increasing to $8.7 billion in 2024–2025, Brady said. Financial results released in February show that Telstra’s net profit after tax for July–December was $1 billion, an 11.5 percent increase over the same period in 2022.

Having laid out this rosy outlook, the CEO offered no specific explanation for the other more than 2,400 job cuts, except that it was part of Telstra’s broader strategy of slashing costs to drive up profits and shareholder returns.

Brady told Telstra workers in an all-hands meeting, reported by Nine media, “as we make difficult choices, we’re thinking about customers.”

Continue Reading