Australian top telco Telstra to fire 25% staff
Canberra (Australia): Telstra Corp, Australia's largest telecommunications company, on Wednesday announced that it will axe 8,000 jobs - one in four employees - over three years in a bid to save 1 billion Australian dollars ($740 million).
Telstra shares fell more than 7 per cent in early trading on the Australian stock market after the announcement to AUSD2.70, its lowest price since 2011.
"We have to do this because I think as an industry, we're at a tipping point," Telstra chief executive Andy Penn told reporters. "The current nature of telecommunications products and services is unsustainable and it has to change, and we at Telstra are going to lead that change," he added. Telstra warned in May that its earnings for the current fiscal year that ends on June 30 will likely be at the bottom of its guidance range of A$10.1 billion to A$10.6 billion. The former government-owned Australian monopoly telephone company blamed the weakened result on increasing competition in mobile and fixed broadband plus rising costs from the National Broadband Network, a national wholesale data network project being rolled out and operated by NBN Co. Ltd., which is replacing Telstra's copper phone lines.
Telstra expects earnings to fall next year to between AUSD8.7 billion and A$9.4 billion, excluding restructuring costs of A$600 million.