Sydney, Australia, March 20, 2020 - Staff at Telstra on the chopping block as part of its aggressive T22 restructuring plan have been granted a six-month reprieve to complement economic stimulus efforts in the face of the COVID-19 outbreak.
The telco said that, while it will continue to focus on its productivity program to reduce underlying costs by $2.5 billion annually by the end of FY22, "it will not announce any further job reductions over the next six months".
However, it will be hiring an additional 1000 locally-based temporary contractors to help manage call centre volumes, following issues with its Philippines all centres after Manila introduced lockdown measures.
"We are looking at every aspect of our business to see what we can do for our employees, customers, suppliers and the economy more broadly, while we maintain a focus on long term value creation," CEO Andew Penn said.
"The most important thing is that as many businesses as possible are still here when we get through the crisis," Penn said in a notice to the market.
Telstra also revealed it would be bringing forward $500 million in capital expenditure from the second half of FY21 into this calendar year to increase the capacity of its network and further accelerate the rollout of 5G, "injecting much needed investment into the economy at this time".
Additionally, the telco will be extending relief measures by waving late fees and disconnections until "at least" the end of April for small business and consumer customers unable to pay their bills.
Sponsorships due to expire this year will also be renewed for another 12 months, "providing more certainty to partners and the many causes Telstra supports".
Telstra has already taken steps to support its customers and staff during the coronavirus outbreak, telling its Australian office staff to work from home and joining the ranks most other telcos in offering extra mobile data to support increased personal demand from customers as offices close to promote social isolation measures.
Penn also took the the chance to update the company’s outlook for the remainder of the financial year, saying it would be difficult to assess the ultimate impact from COVID-19 "at this time".
"Like many businesses it is expected to be material and will depend on how the situation and its impact on the economy and our customers evolves."
Despite the cost of the job cut freeze, temporary hiring blitz and support for customers, Telstra still expects to end the financial year within the guidance outline in its half-yearly results in February.
Free cash flow and underlying earnings before interest, tax, depreciation and amortisation are expected to be at the bottom end of the range, while capital expenditure is expected to fall at the top end of the range.
"We know there will likely be more impacts for us from a financial perspective through this unprecedented period," Penn said.
"It is a rapidly evolving situation and therefore, notwithstanding our outlook update today, we will continue to monitor the effect of COVID-19 on our business and make further updates if necessary.
Posted by Veronica Silva Cusi, news correspondent
Telstra Incorporated is a global provider of advanced communications services to multinational corporations.
Published: Monday, March 23, 2020
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