Overseas service 'better for customers'
Telstra executive John Allan told BusinessDay that "the vendors that we are considering provide services for customers that go beyond our service today, such as 24/7 operations and unique technologies that assist in processing efficiencies, which they do for many directory businesses around the world".
Earlier on Thursday, Mr Allan, who is managing director of the Sensis directories business, allegedly told union officials that "Australians will get better customer services from Manila or India. They have better technology and innovation." Community and Public Sector Union spokesman Julian Lee said the comments were made during a meeting with union officials after Telstra announced the job cuts at the ailing Sensis unit.
The cuts, which include moving 391 customer service positions to the Philippines or India, come just two weeks after the telco booked a record half-year profit of $1.6 billion.
The company is slashing costs to arrest revenue decline at Sensis, which was once a cash cow. Telstra hopes to turn the struggling print-based media business, which produces the Yellow Pages and White Pages directories, into one that is better suited to the digital market.
"Until now we have been operating with an outdated print-based model - this is no longer sustainable for us," said Mr Allan. "Our future is online and mobile."
Prime Minister Julia Gillard described Telstra's decision as dreadful news. "Really dreadful news, particularly for the staff members. It's always incredibly tough when someone loses a job," Ms Gillard told Adelaide radio station 5AA.
The CPSU condemned the company's actions. "Telstra has done well out of Australia, its profits have risen off the back of hard-working staff and loyal customers and this is how it repays them - by sending almost 400 jobs offshore. And, to add insult to injury, we have been told that one of the reasons why they are doing so is because Australian consumers can get better customer service in the Philippines or India," CPSU national secretary Nadine Flood said.
The Sensis business has been under pressure in recent years as customers desert print for digital advertising. At Telstra's most recent half-yearly results, the unit reported a 12.6 per cent fall in revenue.
Frequently Asked Questions about this Article…
Telstra announced job cuts at the ailing Sensis unit, axing many of 648 Australian workers. The cuts include moving 391 customer service positions offshore to the Philippines or India as part of a wider cost‑cutting action.
Telstra says it is moving roles because third‑party vendors in the Philippines and India can offer 24/7 operations, unique technologies and processing efficiencies. The company is also slashing costs to arrest a revenue decline at Sensis and to shift the business from a print‑based model to online and mobile services.
Telstra executives have argued customers will get better service from Filipino or Indian call centre workers due to better technology and innovation among the vendors they are considering. However, union leaders strongly disputed that claim, condemning the decision to move almost 400 jobs offshore.
Sensis is Telstra's directories business that produces the Yellow Pages and White Pages. It has come under pressure because customers are shifting from print advertising to digital, leaving the print‑based model unsustainable and contributing to a drop in Sensis revenue.
In Telstra's most recent half‑yearly results, the Sensis unit reported a 12.6% fall in revenue. Telstra says it aims to transform Sensis into a business better suited to the digital market.
The offshore moves and cost cuts come shortly after Telstra reported a record half‑year profit of $1.6 billion. The company is using cost reductions at Sensis to try to stop revenue declines even while the broader business posts strong profits.
Reactions were negative: Prime Minister Julia Gillard described the decision as dreadful news for staff, and the Community and Public Sector Union (CPSU) condemned Telstra for sending almost 400 jobs offshore and criticised the company’s rationale.
Everyday investors should note that Telstra is cutting costs and moving customer service roles offshore while attempting to pivot Sensis from print to digital. Key facts from the article: Telstra reported a $1.6 billion half‑year profit, Sensis revenue fell 12.6%, and 391 customer service positions are being moved to the Philippines or India. These are the developments likely to affect Sensis’s turnaround prospects.
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