Telstra change a shock to Canberra

James Riley
Editorial Director

Politicians from both sides of the political spectrum have reacted with “shock” and “disappointment” at news of Telstra’s major restructuring and slashing of 8000 jobs.

The federal government used the significant announcement as “further evidence” that its tax cuts should be passed by the Senate, while the Opposition argued that more needed to be done to support businesses in preparing for disruption and the workers impacted by this.

Telstra announced on Wednesday its new Telstra2022 strategy, underpinned by a net reduction of 8000 employees – about a quarter of its entire workforce – and a separation of its infrastructure work into a new company, InfraCo.

Malcolm Turnbull: Sacking 8000 Telstra workers is ‘very, very tough’

Telstra will ditch 1800 consumer and small business plans, replacing them with just 20 core plans, and aims to create about 1500 new roles in software engineering and information and cybersecurity.

The InfraCo company, to be created from July, would comprise Telstra’s fixed network infrastructure including data centres, non-mobiles related domestic fibre, copper, HFC and international subsea cables.

The new company would be wholly-owned by Telstra with the option to demerge and sell it off in the future.

Prime Minister Malcolm Turnbull addressed the news at a press conference on Wednesday, saying he had spoken with Telstra chief executive Andy Penn on Tuesday night.

“The loss of so many jobs is very, very tough, heartbreaking news for the Australians, the Australian workers at Telstra that have been affected.”

“It’s a reminder of why it’s so important to have a strong economy. A strong economy where new jobs are being created all the time so that while one company reduces its workforce there are other businesses, … including in the telco sector are creating new opportunities,” Mr Turnbull told reporters.

The federal government needs to play more of a role in helping companies prepare for digital change and the workers impacted by this disruption in the wake of Telstra’s major restructure, the Opposition has said.

In a joint statement, Labor called on the government to be “actively involved” in ensuring the Telstra workers receive “intensive and tailored support” to transition to new work, saying it’s “simply not good enough to sit back and leave it to Telstra”.

Shadow digital economy minister Ed Husic said the government must step up to better prepare for these sorts of major restructurings impacting thousands of workers.

“The government has a job in this to help out in terms of a major restructuring like this – providing support for people to be able to find new work after they’ve lost their jobs after restructuring like this,” Mr Husic told Sky News.

“The government has a $60 million labour market support stream that in the last budget it has taken a big chunk of money out of,” he said.

“Today has proved that the government has to think very carefully about taking money out of things that can be used to support people feeling the pinch of restructuring. It’s occurred now, it might occur elsewhere and we need support for people that might be affected.”

He said the government has an important role to play in helping Australian companies better prepare for major technology disruption.

“They should be making sure that government can work with industry to put people into work if they’re concerned about where their next paycheck will be coming form,” Mr Husic said.

“Change is constant but preparation isn’t. People will feel a lot loss anxious about the future if they know that companies have thought ahead about things changing because of technology.

“It makes sense for the federal government to have a game plan to work with industry on helping to smooth out disruption when it happens.”

Communications Minister Mitch Fifield said he had already spoken to Mr Penn and has been assured that the job cuts will take place across a number of years.

“This is a difficult day for the staff of Telstra and our thoughts are very much with them. Australia has a telecommunications sector which is intensely competitive and constantly evolving,” Senator Fifield said.

“All Australian businesses operate in a competitive environment which is why the government will continue to seek to secure the passage of our company tax plan through the Parliament,” Senator Fifield said.

Opposition leader Bill Shorten said it is “big news”, and important that Telstra workers are looked after.

“We’ll make sure that Telstra pays people’s’ entitlements, everything people have earned and deserved has to be paid. We also want to make sure that people aren’t just thrown on the scrap heap,” Mr Shorten said.

Urban Infrastructure Minister and former Optus director Paul Fletcher defended the move.

“As a former telco executive I can say these things do happen from time to time in a very fast-moving sector,” Mr Fletcher said.

Obviously, it’s never fun for people who are made redundant and absolutely my sympathies are with them.”

These comments were criticised by the opposition leader.

“He just said this is what happens. But this shows you again how out of touch this Turnbull government is. Eight thousands jobs to go is not another day in the office,” Mr Shorten said.

Shadow defence minister Richard Marles said Telstra’s move was a “huge shock”.

“That is a very significant number of employees – even over that period of time – and that is going to be a very difficult day for every Telstra worker,” Mr Marles said.

Treasurer Scott Morrison said he was “very disappointed” about the news, but he can see “bright prospects” in the telecommunications industry.

“But it still will be hard and it still will be an anxious time for these Australians,” Mr Morrison said.

“And that is why we will continue to redouble our efforts to ensure we are doing everything we can to create the stronger economy that people who find themselves in that situation can go forward with greater confidence.”

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