Telstra to Cut Up to 1,400 Jobs to Lower Costs

MELBOURNE, Australia--Telstra Corp. (TLS.AU), Australia's dominant telecommunications provider, warned it could cut up to 1,400 jobs in the next six months as it grapples with intensifying competition, new technologies and an anticipated earnings gap following the government's rollout of nationwide broadband network.

Chief Executive Andrew Penn said in a memo to employees Wednesday that the company was introducing organizational and workforce changes across its operations, in an effort to cut costs and help it compete more effectively.

Hundreds of jobs across the company would be affected by the cuts, he said.

Telstra forecast an earnings shortfall of as much as 3 billion Australian dollars (US$2.26 billion), citing the rollout of the country's National Broadband Network and lower margins as it resells NBN connections. Customer expectations are also rapidly changing, Mr. Penn said.

Last year, Telstra launched plans to invest A$3 billion to upgrade its networks over three years, as part of efforts to attract and retain customers. As the NBN network rolls out, Telstra is gradually being stripped of its wholesale infrastructure monopoly. It agreed to sell its fixed-line infrastructure to the Australian government for A$11 billion to help build the NBN.

Telstra also faces competition from its two major wireless-telecom rivals and the threat of a newcomer after TPG Telecom Ltd. (TPM.AU) recently said it would invest A$1.26 billion on a new mobile network that would be aggressively priced.

"We need to transform, urgently," Mr. Penn 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 digitization, software, robotics and artificial intelligence."

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

June 14, 2017 04:46 ET (08:46 GMT)