Yahoo Finance Telstra to axe up to 2,800 jobs as competition stiffens amid high inflation
By Himanshi Akhand and Adwitiya Srivastava
(Reuters) -Telstra will be slashing over a tenth of its workforce by 2024 end and stopping its traditional annual inflation-linked price adjustments for mobile plans, the Australian telecom firm said on Tuesday as it grapples with stiff competition.
The country's largest telecommunications firm will be slashing up to 2,800 jobs from its enterprise workforce, as it moves to streamline operations and cut costs as part of a review of its network applications and services business.
Telstra had more than 31,000 employees as of August 2023 according to its annual report.
The company said it expected to record one-off restructuring costs of A$200 million ($133.36 million) to A$250 million in fiscal 2024 and 2025.
The firm is also updating customer terms for its postpaid mobile plans to get rid of the inflation-linked annual price review.
"We will not be making a CPI-linked annual price change to postpaid mobile prices in July 2024," CEO Vicki Brady said.
"This is occurring within a dynamic environment, with an evolving competitive landscape, rapid advances in technology, changing customer needs, and the ongoing inflationary pressures facing all businesses."
"The removal of CPI-linked price increases in mobile is a surprise to us," Jarden analysts said, adding that the move might be incrementally negative for mobile industry returns in the short term.
A starting point to remove 2,800 roles as part of an ongoing review is "clearly significant", they noted.
Telstra also stated that by taking these steps, it hopes to reduce its costs for T25 - an operating strategy that the company adopted in 2021 - by A$350 million by the end of fiscal 2025.
The firm reiterated its earnings forecast for 2024 and said it expected underlying earnings before interest, taxes, depreciation, and amortization for 2025 between A$8.4 billion and $8.7 billion.
($1 = 1.4997 Australian dollars)
(Reporting by Himanshi Akhand in Bengaluru; Editing by Shailesh Kuber, Sherry Jacob-Phillips and Rashmi Aich)
