Telstra has revealed a raft of sweeping changes to the company's organisational structure as it prepares to let go of 1400 staff over the next six months.
Chief executive Andrew Penn sent a note to staff this morning informing them that staff would be cut from most parts of Telstra's business and from all levels of seniority and from all states and territories.
Penn said that the business needed to transform "urgently" if it was to meet the challenges facing the technology industry.
"This means we will need to become a leaner organisation, one built on digitised systems and services for customers and employees, and one where we will continue to rely on partners for scale," he said.
"Some of the jobs we do today will no longer exist and new roles will need to be created to focus on new technology driven by expansion into digitisation, software, robotics and artificial intelligence. This evolution of roles is not exclusive to Telstra or our industry – it is something that is happening worldwide and across almost all industries."
Penn also highlighted the $2-3 billion earnings gap that will be left when the construction of the NBN is completed, and that margins on NBN resale is likely to be lower.
The biggest changes are to Telstra's organisational structure as the company shifts its focus on four key areas – networks, NBN and commercial delivery, IT and digital solutions, and customer management.
Penn outlined how each of its business units would be affected:
Telstra Retail will be renamed to Telstra Consumer and Small Business. The new business will be divided into three core divisions: customer experience and transformation, Telstra products and consumer and small business sales and service. Telstra will also renew its focus on its budget ISP brand Belong.
Telstra Global Enterprise and Service GES will be renamed as Telstra Enterprise. Traditional sales and service functions teams will be brought into one team. The new business will also implement a new sales and services model to improve customer experience.
Telstra Business will be integrated into the Consumer and Small Business unit. The enterprise premier business customer segment and teams will move to Enterprise, while small business customers will remain in Consumer and Small Business.
Media and Marketing where domestic and international marketing teams will be brought together.
Last year, Telstra flagged its intention to cut costs by $1 billion over the next five years. Over the past six months, the telco has already slashed hundreds of jobs from a number of divisions.
"While our size and shape will evolve, our success will continue to be built on people with deep connection to customers, expert knowledge and recognised technical expertise," said Penn.
"We are committed to being a dynamic customer-centric company that invests deeply in leadership, agile ways of working and developing your skills to keep pace with the changing nature of our industry.
"All great companies have the capacity to manage periods of change and disruption and reinvent themselves as they go."
The Communications Workers Union said it was "shocked" by the scale of the job cuts, which it was initially advised of through media reports.
"But [the CWU is] also angry that Telstra has so little respect for its employees and their representatives that it would give the CWU and other Telstra unions no forewarning at all of this announcement," the union said. "It says a lot about how much value the company really puts on consultation."
The CWU added that 500 roles slated for removal haven't been identified yet.
"All this leads us to the view that this is a top-down exercise, driven more by abstract head-count than by technological redundancy or procedural efficiencies. It will be Telstra’s customers as well as its employees who will pay the price for this approach as they have so often in the past."
The union will meet with Telstra tomorrow to seek further details.