170 Telstra jobs to be axed, sent to India
Telstra has signalled it will cut up to 170 jobs as it shifts part of its back office operations to India, amid sweeping changes to the company's operations. If the decision goes ahead, the job cuts will begin from October and will take six to 12 months to complete.
It comes after an announcement in May that the telco would reorganise its operational activities into five groups, three of which - networks, IT solutions and customer service delivery - would be new.
Those changes are expected to affect about half of Telstra's 30,000 domestic workers.
But the job cuts announced on Tuesday are part of a different restructure of operations.
Telstra staff were told of the potential cuts before the plan was made public.
David Burns, head of Telstra's national applications services (NAS) business, said the restructure and job cuts would affect the unit. The unit provides customers in government and business with information and communications technology network products and services, including managed network services, security, cloud and video conferencing services.
Mr Burns said the company's business model was inadequate and the offshoring needed to occur to promote domestic and international growth.
"Today, we are announcing a proposal to establish global delivery centres with industry partners ... in India to help us pursue international and growth aspirations for this [NAS] business," Mr Burns said. "Our need to expand our capability and support our growth in Asia is a need for now."
But analysts said the move had much to do with reducing costs.
"I think that's the main rationale," BBY analyst Mark McDonnell said. "I'm afraid that is very much the way the business needs to be run these days, with very little evidence of [net] growth in revenues and a lot of pressure on costs.
"Telstra's been reducing its staffing literally for years and another group of 170, and I don't mean to make light of it, but it's just the latest instalment."
The Indian jobs would be in service operations, service level agreement reporting, business and infrastructure operations, and resource management.
Telstra did not inform the Australian Securities Exchange about the move because it was not considered significant enough under continuous disclosure rules.
The Community and Public Sector Union has heavily criticised Telstra for the move. It says the real number of job losses could be 254, because an extra 84 supporting contractor positions might also be cut.
"We're expecting to move those 170 roles across [to India] but what that becomes in the future, based on growth and other opportunities, I don't have a number to share with you," Mr Burns said.
Telstra shares slipped 3¢ on Tuesday, to $4.76.