Telstra share price slides on massive restructure

Telstra’s drastic plan to cut 9500 jobs and restructure its business has seen its share price slide five percent and led to a wave of criticism.

The telco this morning unveiled its Telstra2022 strategy including a “net reduction” of 8000 job cuts, which includes 1500 new jobs, suggesting the actual cuts will impact 9500 staff.

The news was poorly received by the market, where shares fell as much as six percent before recovering slightly to be down five percent at the time of publication.

It was similarly criticised by unions and political parties.

The Communication Workers Union accused Telstra of “putting short-term profits above long-term services”.

National president Shane Murphy said the redundancies amounted to “one of the largest job cuts in Australian corporate history.”

“In an industry which is booming, Telstra has clearly chosen to prioritise short term profits to keep shareholders happy, instead of investing in the future of Australia’s network,” Murphy said in a statement.

“In particular the [union] is concerned about plans to hive off Telstra’s network of infrastructure, which seems a first step to selling it off altogether.

“This is a recipe for reduced services, with Telstra’s highly skilled workforce of employees and contractors replaced by casuals and piece-workers.”

Murphy called on Telstra CEO Andy Penn to “reconsider this drastic action.”

The union is set to meet with Telstra executives at 2pm today.

Shadow communications minister Michelle Rowland said in a Twitter statement that “our thoughts are with Telstra employees and their families today given news of significant job cuts.

“Labor will be keeping a very close eye on the impact on front line staff and customer service,” Rowland said.

The Greens telecommunications spokesperson Senator Jordon Steele-John also blasted the cuts, which he said amounts to “a quarter of their Australian workforce”.

“This is what happens when a company’s priorities shift from service and service delivery, to profits at any cost,” Steele-John said.

Telstra CEO Andy Penn said he was excited about the future prospects of Telstra, but said that he needed “to be transparent and upfront about the scale of change needed at Telstra.”