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· Posted on
May 22, 2024

Telstra calls time on 9% of its workforce after announcing 2,800 job cuts by the end of 2024

Telstra's CEO announced that they will be cutting 2,800 jobs, which is 9% of the workforce.

What's the key learning?

  • Telstra’s Enterprise business was already hurt hard over the past 12 months and part of this is due to landlines becoming obsolete, not just in homes but offices too.
  • Reducing workforce, particularly in service-oriented industry like the industry, can have serious consequences.
  • Maintaining a balance between efficiency and customer satisfaction is vital for sustaining market position and brand reputation in the long term.

👉 Background: Telstra is the largest telco network in Australia. We’re talking over 22 million retail mobile services with over 31,000 employees.

👉 What happened: Yesterday, Telstra's CEO announced that they will be cutting 2,800 jobs, which is 9% of the workforce. The bulk of these cuts will come from Telstra’s enterprise unit. This is the division that works with Australia’s biggest companies like AGL Energy, McDonald's and The Government of South Australia.

👉 What else: In 2021, Telstra planned a cost cutting activity that would see it cut $500m by the end of the 2025 financial year. But in February this year, Telstra warned that they were behind target to reach their goal. These 2,800 job cuts are expected to save Telstra nearly $350 million.

What's the key learning?

💡Cutting deep and cutting fast can risk cutting through a whole business.

💡Over the past 12 months, Telstra’s Enterprise business saw its first-half earnings drop 67%. Yep, it generated just $71 million in earnings out of Telstra’s $4 billion in overall earnings.

💡But by reducing its enterprise unit, Telstra risks deteriorating relationships with its major corporate clients who rely on personalised and prompt service

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