Telstra to axe 6,000 roles by the end of FY19

Telstra to axe 6,000 roles by the end of FY19

Writes down the value of its legacy IT assets by $500M

Andrew Penn (Telstra)

Andrew Penn (Telstra)

Credit: Telstra

Telstra is expecting to cut up to 6,000 roles by the end of the 2019 financial year, putting it "on track" to reach the previously announced net cost out target of $2.5 billion by the end of 2022.

The telco has commenced a consultation with employees and representative unions on proposed job reductions previously expected to be announced in the first half of FY20.

This will increase the restructure costs for FY19 by $200 million, costing the company a total of $800 million. Telstra has advised that affected employees will remain with the company until early FY20.

By bringing the costs forward, Telstra's remaining restructuring costs from the T22 strategy will come to around $350 million after FY19.

The telco also expects to make a non-cash impairment and write down of the value of its legacy IT assets by approximately $500 million.

"We understand the significant impact on our people and the uncertainty created by these changes," Telstra CEO Andrew Penn said. "We are doing everything we can to support our people through the change and this includes the up to $50 million we have committed to a transition program that provides a range of services to help people move into a new role.

"We expect to have announced or completed approximately 75 per cent of our direct workforce role reductions by the end of FY19.

"We will continue to see role reductions as we replace our legacy systems, digitise and simplify how we work, and respond to things like declining NBN and call volumes, but if a final decision is made on the proposal announced today we expect the majority of our T22 restructure will be behind us."

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