Telstra job cuts: Telstra’s biggest surprise isn’t its 2800 job cuts

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Telstra boss Vicki Brady is sending a message to the market: the telco must lift returns on investment, and that means hard choices.

Already a subscriber?It’s 21 months since Vicki Brady took the reins as Telstra chief executive, but the announcement she made on Tuesday might be the most important of her time in charge., this is arguably the least surprising part of the message.The first tranche of jobs will go from Telstra’s enterprise division, which was placed under strategic review by Brady when she delivered Telstra’s first-half results in February. The division is battling a mix of cyclical and structural challenges.

Brady argues that different plans that suit different types of customers require a less rigid approach than simply following inflation. But if Brady’s restructuring of the enterprise business was widely expected, the announcement that mobile phone plan pricing would be de-linked from inflation took analysts by surprise.Telstra tied mobile pricing to CPI two years ago, and had been widely expected to push through another round of inflation-linked price changes in July; now, Telstra says it will announce its pricing decisions a little later in the year.

 

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