Unions slam Telstra for plans to cut 8000 jobs

Unions have slammed Telstra's plans to slash 8,000 jobs over three years.

The embattled telco said on Wednesday it is targeting a further $1 billion in cost cuts by 2022, taking the total cost reduction to $2.5 billion.

In a statement, Australian Council of Trade Unions (ACTU) Secretary Sally McManus said Telstra "has betrayed the people who work for them by making them jobless and the people who rely on their services".

"They have chosen to make 8,000 people jobless, they have destabilised an entire workforce, they have chosen to deliver poorer service to their customers – they have chosen to put profits ahead of people, jobs and service."

"Unless this decision is reversed, the company will end up paying the price, as their reputation disintegrates, their service and coverage erode and their standing as an iconic Australian company is irrevocably damaged."

It was a point echoed by Communications, Electrical and Plumbing Union (CEPU) President Shane Murphy.

"I think the community trust in Telstra is at an alarming rate considering the amount of outages over many, many months and over the last 12 months or more we've had broadband services off the air."

"Creating a new Telstra"

Telstra CEO Andrew Penn defended the job cuts, saying he was "creating a new Telstra" that could lead the increasingly competitive telecommunications market.

"In the future, our workforce will be a smaller, knowledge-based one with a structure and way of working that is agile enough to deal with rapid change. This means that some roles will no longer be required, some will change and there will also be new ones created,” Mr Penn said in a share market note.

"We understand the impact this will have on our employees and once we make decisions on specific
changes, we are committed to talking to impacted staff first and ensuring we support them through this
period."

Communications minister Mitch Fifield said he had spoken with the Telstra CEO, who assured him the changes would be phased in over a number of years.

There will also be a $50 million "transition" fund to support staff caught in the cuts.

"This is a difficult day for the staff of Telstra and our thoughts are very much with them," Mr Fifield said.

Mr Fifield also used the news to push the Senate to back the Coalition's corporate tax cuts, which are currently stalled without sufficient support on the crossbench.

"It's important to recognise that our telecommunications companies operate in a highly competitive environment that is constantly evolving," he said.

"That is indeed true for all Australian businesses, which is one of the reasons why we will continue to work hard to secure the passage of our company tax cuts."

The changes form part of a three-year plan which Mr Penn says will fundamentally change the nature of telecommunications products in Australia.

"The rate and pace of change in our industry is increasingly driven by technological innovation and competition. In this environment, traditional companies that do not respond are most at risk," he said in a statement.

"We are now at a tipping point where we must act more boldly if we are to continue to be the nation's leading communications company."

Telstra CEO Andrew Penn.

AAP

Despite the massive cost-cutting, Telstra insists that it will remain a "premium" telecommunications brand and lead in the roll-out of 5G mobile networks.

The announcement comes less than a month after Telstra warned that its 2017/18 earnings will likely be at the bottom of its guidance range of $10.1 billion to $10.6 billion, blaming increasing competition in mobile and fixed broadband, and rising costs from the NBN.

Since Mr Penn took over as CEO in May 2015, Telstra shares have fallen 53.8 per cent.

Government, opposition reacts

Treasurer Scott Morrison says it will be an anxious time for Telstra workers and their families, but the government is doing its best to ensure there are other jobs to go to. He said there were "bright prospects" in the telecommunications industry.

"But it still will be hard and it still will be an anxious time for those Australians," Mr Morrison said outside the AAP Master Builders National Leaders Summit in Canberra.

"And that is why we will continue to redouble our efforts to ensure we are doing everything we can to create the stronger economy that people who find themselves in that situation can ... go forward with greater confidence."

Government minister Paul Fletcher has sympathy for the Telstra workers but says job cuts in the sector are to be expected.

"As a former telco executive I can say these things do happen from time to time in a very fast-moving sector," he told Sky News on Wednesday.

"Obviously, it's never fun for people who are made redundant and absolutely my sympathies are with them."

Victorian Premier Daniel Andrews said it was terrible news for the families of the workers.

"There will be many people in Victoria who will be getting that very sad news that as a Telstra employee their job is gone," he told reporters.

"They're in our thoughts today, but beyond that, we stand ready to support them in terms of finding a new job, retraining, reskilling, all of those things."

Federal Labor frontbencher Richard Marles has described as a "huge shock" Telstra's decision to slash 8,000 jobs.

"That is a very significant number of employees - even over that period of time - and this is going to be a very difficult day for every Telstra worker," Mr Marles told Sky News on Wednesday.

Telstra outages

Telstra's cost-cutting announcement follows a fresh bout of outages in Telstra's mobile network.

Thousands of customers on mobile reseller services using Telstra's network were affected by outages from Monday night, with a Telstra spokesperson saying most problems had been resolved by Tuesday afternoon.

According to Telstra's website, outages caused intermittent mobile service in Sydney, Melbourne, Brisbane, Adelaide and Hobart.

Telstra said there was no issue for its own customers on 3G or 4G networks but a "vendor platform issue" had affected reseller services for "a small number of wholesale customers".

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