Telstra to shed 2,800 jobs as it resets enterprise unit

Telstra is to cut 2,800 jobs, mostly from its underperforming enterprise business.

CEO Vicki Brad said Monday the job cuts were a result of a "reset" of the enterprise group, along with other unspecified organizational changes. Most of the positions would be eliminated this year, she said.

The operator announced a review of the enterprise group in February following a steep drop-off in sales in its key data, professional services and calling apps segments.

It is Telstra's second-largest division, accounting for 30% of revenue.

The company says it has since streamlined its enterprise product portfolio, reducing the number of networks and services (NAS) products by nearly two-thirds.

It has also simplified its customer sales and service and slashed costs in Telstra Purple, its tech services business. It has moved its global business services function into other parts of the business. 

Telstra said the enterprise group would now focus on areas where it has the strongest differentiation. 

It said it expected the restructuring to remove A$350 million (US$233 million) in costs by the end of 2024/25. 

Impact on service delivery

The job losses appear to have taken the main industry union by surprise.   

James Perkins, the Communication Workers Union's national assistant secretary, described the decision as "out of the blue," IT News reported.

He said it would be difficult for Telstra to "slash thousands of jobs without seriously impacting the delivery of services."

Telstra's Brady said the measures were necessary to ensure the company could continue to invest to meet the demand for data volumes and deliver improved connectivity for customers.

"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," she said. 

The company reported headcount of 32,600 at the end of 2023. 

Telstra said its guidance of A$8.2 billion ($5.46 billion) to A$8.3 billion ($5.52 billion) in EBITDA (earnings before interest, tax, depreciation and amortization) for 2023/24 was unchanged.

It announced early guidance for 2024/25 of underlying EBITDA of A$8.4 billion ($5.59 billion) and A$8.7 billion ($5.79 billion).

Telstra's ASX-listed stock fell 2.2% Monday.