Telstra to cut 6,000 jobs by end of FY19, take AUD 500 mln impairment charge

Nieuws Algemeen Australië 29 MAY 2019
Telstra to cut 6,000 jobs by end of FY19, take AUD 500 mln impairment charge

Australian operator Telstra has announced that "as a result of good progress on its T22 strategy”, it expects to take a non-cash impairment and write down the value of its legacy IT assets by around AUD 500 million. Telstra also announced it is increasing guidance on its FY19 restructuring costs by AUD 200 million, as a result of bringing forward consultation on proposed job reductions. 

Telstra has launched consultations with employees and representative unions on proposed job reductions previously expected to be announced in the first half of FY20. This will result in these restructuring costs being brought forward from FY20 to FY19. 

With the start of consultations, Telstra expects to reduce around 6,000 jobs by the end of the financial year, and reach the previously announced net cost out target of AUD 2.5 billion by the end of 2022.

As a result of bringing these announcements forward, Telstra expects total FY19 restructuring costs to increase from around AUD 600 million to around AUD 800 million. While impacted employees will not be leaving the organisation until early FY20, consultation is expected to conclude in mid-June and therefore the costs will be included in Telstra’s FY19 results. If this additional charge were to occur in FY19, Telstra expects total remaining restructuring costs, after FY19, from T22 initiatives to be around AUD 350 million. 

Telstra has committed up to AUD 50 million to a Transition program that provides a range of services to help people move into a new role. The operator expects to have announced or completed around 75 percent of its direct workforce role reductions by the end of FY19. 

Telstra has also reaffirmed its FY19 guidance. Back in August 2018, Telstra announced it expects income to grow to AUD 26.5-28.6 billion based on new accounting standards in FY19. EBITDA (excluding restructuring costs) is expected to decline to AUD 8.8-9.5 billion, and restructuring costs will amount to around AUD 600 million for FY19. Capex is forecast at AUD 3.9-4.4 billion, and free cash flow is expected to reach AUD 3.1-3.6 billion in FY19.

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Telstra

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Australië

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