Telstra Puts Profits Before Jobs
'Telstra Profits Surge' The Courier-Mail (9/3/2000)

UP to 2000 regional Queensland jobs could vanish under Telstra plans to slash its national workforce by 10,000 over the next two years.

Shares in the telecommunications giant were hammered yesterday, despite the announcements of a record half-yearly profit of $2.1 billion — a 15 percent jump — and the cost-cutting scheme.

Call centres in Mackay, Rockhampton, Maryborough, Nambour, Townsville, Toowoomba, Ipswich and Roma could be "rationalised" under Telstra's bid to reduce operating costs by $650 million.

Telstra chief executive Ziggy Switkowski, who will outline the staff cuts to federal MPs today, described the redundancies as regrettable, but expressed satisfaction at the profit milestone.

"While any loss of employment is a matter of great regret, it is fortunate that strong growth in the industry provides real options for individuals affected," he said.

About 8000 Telstra staff will be sacked within two years. Another 5000 jobs will go through natural attrition and work being contracted out. About 3000 new employees will be hired.

Unions fear another 6000 jobs could be lost when Telstra contracts out work now done by its Network Design and Construction arm.

The record profit did not impress shareholders, with Telstra suffering its largest single one-day fall. The full shares dropped 50.1c to $8.20 and instalment receipts slipped 47c to $5.23.

Communications Union secretary Cohn Cooper said he believed call centres from 67 regional and country areas would be rationalised, including 10 in Queensland.

Telstra already has cut its workforce by 26,000 over the past four years.

After Telstra announced the latest cuts, Liberal, Labor and National MPs warned they would not tolerate any further downturn in phone services in country regions.

"This a savage blow for 10,000 families and a savage blow for rural and regional Australia, because we know where the job losses will come from," federal Opposition communications spokesman Stephen Smith said.

Earlier yesterday, the Telecommunications Industry Ombudsman chastised phone carriers for failing to improve basic services to consumers, including simple telephone connections. The Ombudsman said almost 14,000 complaints were lodged last year about connection and telephone faults.

Mr Switkowski said Telstra was committed to improving its service.

"Enormous efforts continue to be directed towards improving service delivery to all our customers. This is particularly important in the most demanding areas of regional Australia," he said.

Premier Peter Beattie and state Opposition Leader Rob Borbidge condemned the job losses, saying the regional areas would be hardest hit.

Mr Borbidge's spokesman said the losses also fired National Party determination to oppose further privatisation of Telstra, which remains 50.1%-owned by the Federal Government

Mr Beattie said Telstra's decision and the GST were "seriously undermining my 5% job target".

But the toughest critics were within the Federal Government itself, where National Party Senate leader Ron Boswell said he feared Telstra's previous poor service in the bush would worsen.

"Telstra's performance has been very, very ordinary in rural Australia and now they are going to take more people out of the company you have to wonder how they are going to meet their obligations," Senator Boswell said.

Toowoomba-based Liberal Ian Macfarlane said Telstra should maintain jobs in the bush as regional call centres had proved to be more efficient than those in the city. "Call centre technology is technology that can be put anywhere, these jobs should be maintained," he said. Call centres handle many customer support services, including the 013 information line.

Mr Switkowski said Telstra's profit had risen through increased sales, including a surge in the use of mobile telephones and the Internet.

"For the first time, revenue from our non-traditional businesses — chiefly mobiles, data and the Internet — has exceeded revenue from traditional business," he said.