Telstra may axe hundreds of jobs in major restructure

Telstra Corporation Ltd, Australia's leading telecommunications company, has announced sweeping changes to its operational structure that could result in significant job losses in Australia, as the company is shifting away from its traditional business.

In a communication to the company's staff yesterday, chief operation officer Brendon Riley described the move as the ''most substantive changes for 10 years''.

Telstra plans to focus more on high-growth areas such as wireless, National Broadband Network (NBN) and network services, while cutting back on loss-making operations, such as its Sensis directory business.

The changes are expected to become effective by 1 July.

''Our traditional businesses are coming under increasing margin pressure and the largest portion of our budget is spent supporting them,'' Riley said

''This is not a sustainable business model and we have an obligation to redefine our contributions to Telstra,'' he further stated.

Indeed, lot of Telstra's resources are concentrated on its fixed networks, which are being affected as NBN roll out is gathering momentum and more and more consumers are shifting their communication activities to wireless networks. 

Melbourne-based Telstra builds and operates telecommunication networks and provides voice, mobile, internet and pay television services. It has around 8.1 million fixed line and 13.8 million mobile customers.

The company's global division Telstra Global is a supplier of managed network services and international data, voice and satellite services. Telstra serves many of the world's top companies, spanning Europe, Asia Pacific and the Americas.

Telstra Operations is responsible for all aspects of its networks covering design, engineering, construction and providing customer services and also NBN-related infrastructure and network application services.

The restructuring is expected to bring significant reduction in the company's headcount in Australia although it has not specified the number of job losses.

Half of the company's 30,000 Australian workforce for which Riley is responsible are likely to be affected by the massive restructuring plan.

''I anticipate that we will be creating efficiencies which will mean we have jobs that will go in certain areas, but on the other hand there is investment in jobs creation that we need to do,'' Riley said.

The company plans to reorganise its operations into five groups including three new groups-IT solutions, networks and customer service delivery.

Two existing operational units, including Telstra's work for NBN and its network applications & services will be retained.

''The groups would be responsible for ''end-to-end delivery of services to our customers,'' Riley said.

"Today's announcement is the first step in our move to this new model. I understand there is still a lot more work to be done to give everyone clarity around our structure throughout the organisation," he said.

Telstra had a total workforce of nearly 38,700 as at the end of December 2012, about 2,500 less than a year ago. The company has cut around 8,000 jobs in the last four years.

It is expected that details of restructuring plan will be announced in the coming weeks.