Telstra jobs to be cut across the board amid need to “urgently” transform

Telstra chief, Andy Penn, opens up about fresh redundancies and a new transformation plan
Andrew Penn - CEO, Telstra

Andrew Penn - CEO, Telstra

Telstra chief, Andy Penn, has revealed that 1400 job cuts flagged by the telco will affect roles right across the company’s entire business, as it launches itself headlong into an overarching transformation strategy.

Telstra confirmed on 14 June that it planned to cut the jobs from its ranks in a fresh round of redundancies. Now, in a message sent to Telstra employees, Penn has revealed that the cuts will come from most parts of the business across much of the country.

“We are consulting with our people on proposed changes that would ultimately result in up to 1400 roles no longer being required over the next six months,” he said. “This impacts positions from most parts of the business, at all levels of seniority and from all states and territories and, in some cases, internationally.”

The proposed redundancies, according to Penn, are all part of broader plan to better position the company to tackle evolving market and technological pressures.

“Telstra faces an unprecedented world of technology innovation and digital disruption,” Penn said. “This presents opportunities because we are at the centre of helping our customers adapt to technology innovation in their own industries.

“However, it also presents significant challenges as technology is disrupting our own operations as well. I strongly believe we can succeed in this environment, however to do so we need to transform, urgently.

“We will need to become a leaner organisation, one built on digitised systems and services for customers and employees, and one where we will continue to rely on partners for scale,” he said.

In response, Telstra has announced proposed organisational restructures and workforce changes across its Operations, Retail, Global Enterprise and Services, and Media and Marketing divisions.

According to Penn, the proposed changes designed to enable Telstra to work and deliver simpler end-to-end services, reduce its overall operating costs and allow it to compete more effectively.

“As a company, we are facing rapidly changing customer expectations, intensified market pressures and increasing competition, disruptive technology changes and shifting industry economics,” he said. “This includes things that we have talked about previously – the $2-3 billion EBITDA [earnings] gap due to the rollout of the NBN; margins on resale of the NBN likely to be lower than today; and meeting our customers’ increasing expectations of us.”

While Penn claims to believe the company has a “great future” ahead of it, he stressed that, for it to be successful, the telco can’t afford to operate as is has always done.

“We must change in order to continue to deliver for our customers. That means that we have to transform and challenge every aspect of how we work,” he said.

“That is why today we are announcing a number of proposed changes that we believe will drive greater simplicity and accountability across the business – many of which you have told us would make your roles much easier."

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The changes include a new organisational structure for the company’s Operations footprint, to provide end-to-end responsibility and reduce complexity in four key lines of business: Networks, NBN and Commercial Delivery, IT and Digital Solutions, and Customer Service Management.

It will also see Telstra Retail evolve its business model to bring together capabilities from across the group to create three core divisions: Customer Experience and Transformation; Telstra Products; and Consumer, and Small Business Sales and Service.

“We will also renew our focus on Belong. Reflecting these changes we will also change the name Telstra Retail to Telstra Consumer and Small Business,” Penn said.

Meanwhile, the company’s Global Enterprise and Services segment will see the implementation of a new sales and service model aimed at giving improved customer experience by bringing together the traditional Sales and Services functions into one team, which will have end-to-end accountability for the customers they serve.

“We will also change the name of GES to Telstra Enterprise,” Penn said.

At the same time, the Telstra Business division, will be integrated into Consumer and Small Business, and Enterprise in a bid to maximise product alignment and growth opportunities.

This will see the Premier Business customer segment and teams who serve them move to Enterprise, and the Small Business customer segment remain in Consumer and Small Business.

For Telstra Media and Marketing, the aim is to streamline how the company goes to market, including bringing together its domestic and international marketing teams for Enterprise.

“Each business impacted will be talking to teams today about the changes and how they will be impacted,” Penn said in his message to employees, dated 14 June.

“We have a bold plan – to transform our culture, processes and systems to meet current market expectation and succeed in the future marketplace,” Penn said.

“Other parts of the plan are confronting and difficult, but we know we need to change in order to do things quicker and in an easier way.

“We know we need new and different skills to support new technologies and services. We know we need the ability to be more flexible with our resources,” he said.

The new strategic plan comes less than a year after Telstra revealed plans to invest an extra $3 billion over the following three years in its networks and digitisation. 

"Our customers and our networks are our biggest assets," Penn said at the time. “We have plans for consumers, small and medium sized businesses, domestic and international enterprise users, governments and our wholesale customers. 

"The investment is about setting the pace for the network and company of the future, just as we have done in each of the previous network generations," he said.