Telstra is slashing 8,000 jobs as part of a plan to simplify its operations and reduce its cost base.
Telstra has announced plans to slash 8,000 jobs, including one in four executive and middle management roles, in a major cost-cutting overhaul.
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.
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."
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 have worked hard preparing Telstra for this market dynamic while ensuring we did not act precipitously. However, 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."
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.
