Telstra paves the way for final sale




It was no surprise when Telstra revealed plans to further reduce its workforce by at least 3000 workers to the Senate estimates committee on May 26.

A week of fudging by Telstra's senior management had followed the Australian Financial Review report on May 20 that up to 4000 jobs may be axed. Then Telstra's finance director John Stanhope admitted at the Canberra hearing that there would be about 3000 staff retrenched in the next financial year. This equates to 7.5% of Telstra's current staff total of 42,000 and follows on from the 11,423 jobs already axed in the three-year period to April 2003.

In this financial year alone, 1500 jobs will be cut from the infrastructure division that looks after the ageing copper network and about 600 from Telstra Country Wide, which services rural and regional Australia.

This move is clearly aimed at pleasing Telstra's institutional investors who have for some time been demanding more aggressive cuts in expenditure, and that Telstra moves closer to the Coalition government's stated aim of full privatisation. While treasurer Peter Costello recently said that the sale of the final 50.1% is unlikely to happen before 2005-6, the delay is more a reflection of Telstra's share price following the global telecommunications market collapse, than any concern for keeping the company public.

The latest round of mass sackings will further pressure staff to meet more and more unrealistic performance targets amid constant harassment from management and the threat of outsourcing. It is not unusual for staff to be called at home while on sick leave, or cajoled by management into working on public holidays or working overtime at short notice.

While Telstra management is forecasting a 9% cut in capital expenditure for the next financial year — from $3.3 billion to $3 billion — it was revealed at the Senate estimates committee that CEO Ziggy Switkowski was paid $2.4 million last year. Also, $1.5 billion is being spent on outsourcing IT and up to $30 million was spent on corporate sponsorship.

An increase in line rental fees has also netted Telstra an estimated $204 million to March 2003 and a further rental hike is due on July 1. The deregulation of the telecommunications industry, started under Paul Keating's Labor government, has delivered huge cost savings to big business, but residential customers and telecommunications workers have been the losers in the rush for privatisation and profits.

From Green Left Weekly, June 4, 2003.
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