Finance Finance News Telstra to slash $500m, limits job cuts

Telstra to slash $500m, limits job cuts

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Telstra CEO Andy Penn is hosting a major virtual meeting of investors to talk about its growth plan. Photo: AAP
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Telstra boss Andy Penn has ruled out major job cuts as part of efforts to slash costs by $500 million by 2025.

Telstra on Thursday revealed the cost-cutting goal would help earnings improve by mid-single digit figures by the 2025 financial year. The plan is called T25.

The carrier has cut about a third of its workforce since the advent of the National Broadband Network and Mr Penn was asked if more workers would follow.

“I made the point today it’s not a feature of our T25 strategy,” he said.

“We don’t expect to see material changes to our headcount and job reductions going forward.”

Much of the savings will come through reduced spending on information technology.

Chief financial officer Vicki Brady said the business was consolidating its technology platforms.

Telstra has earmarked the next level of mobile phone technology, 5G, to drive its earnings.

Carriers like Telstra are betting customers will pay for higher data allowances to watch better-quality video and other benefits.

Telstra aims to expand its 5G network coverage to 95 per cent of the Australian population, which includes boosting links for regional communities.

“We expect 80 per cent of all mobile traffic to be on 5G by FY25,” Mr Penn said.

For shareholders, the T25 plan also promises earnings per share in the high teens between 2021 and 2025.

Telstra in August promised a $1.35 billion share buyback for investors after it improved full-year profit after tax by 3.4 per cent to $1.9 billion.

The telco said its underlying business, which excludes the costs of customers leaving for the National Broadband Network, would return to growth this financial year.

Shares on the ASX were higher by 0.76 per cent to $3.96 at 1545 AEST.