Over two thousand job losses proposed in Telstra restructure

Telstra has unveiled measures to reset its Enterprise business, streamline operations, and enhance productivity. The company has reaffirmed its financial guidance for FY24 and provided early guidance for FY25.

Telstra plans to update customer terms for its postpaid mobile plans by removing the annual CPI-linked price review. This change aims to simplify the pricing strategy and offer greater flexibility in adjusting prices based on customer needs.

Up to 2,800 job reductions from Telstra's direct workforce are proposed, pending consultation with employees and unions. CEO Vicki Brady emphasised the necessity of these measures for continued investment in infrastructure, technology, and services.

"Telstra's investment in infrastructure and technology is essential for growth and supports Australia's digital economy," Ms Brady said, noting the dynamic competitive landscape, rapid technological advances, and inflationary pressures.

Several actions have been identified to reset Telstra Enterprise, including reducing the number of NAS products by nearly two-thirds, simplifying the customer sales and service model, and aligning the cost base of the Telstra Purple tech services business with market dynamics.

Ms Brady acknowledged the challenges for employees, stating, "We understand these changes can create uncertainty, and we are committed to supporting our people with care and clear communication."

Telstra will also integrate its Global Business Services function into other parts of the business to simplify processes and empower leaders. The company aims to achieve $350 million of its T25 cost reduction target by the end of FY25 and anticipates one-off restructuring costs of $200 - $250 million across FY24 and FY25.

The removal of the CPI-linked annual price review for postpaid mobile plans will align them with other products and provide greater pricing flexibility. "This approach recognises various factors in pricing decisions and allows adjustments at different times based on value propositions and customer needs," Ms Brady explained.

Telstra reiterated its FY24 guidance and provided FY25 Underlying EBITDA guidance of $8.4-$8.7 billion. The company is confident in its ability to grow mobile revenue and EBITDA, supported by cost reduction actions and the Enterprise business reset.

"Our strategy beyond T25 will build on our momentum and position the organisation for success through to 2030," Ms Brady concluded.