By Tom Westbrook, Reuters
June 14, 2017
Telstra Corporation Ltd , Australia’s largest telecoms company, will lay off 1,400 workers in a fresh round of job cuts, eager to rein in costs ahead of a new government-owned broadband network and as competition squeezes mobile margins.
Telstra dominates the mobile telephone and broadband industries in Australia but like for many incumbent telecom firms around the world, profits from traditional fixed-line networks have dropped while new rivals move in on mobile market share.
The latest round of cuts announced on Wednesday are equivalent to 4 percent of its workforce and bring total headcount reduction since December 2015 to 7.4 percent of staff.
More jobs are likely to be shed as the company attempts to transform in to a technology company, said telecommunications analyst Paul Budde, who runs his own consultancy.
“It is a clear trend that’s taking place and if you compare that to the Googles and the Facebooks and the Skypes of this world, the traditional telecommunications industry is still heavily overpopulated,” he said.
Telstra will lose its wholesale business when the new state -owned National Broadband Network (NBN) replaces the company’s copper lines by about 2020 – a loss that will hit annual earnings by A$2 billion to A$3 billion ($1.5 billion-$2.3 billion).