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A report from the Sydney Morning Herald says that the job cuts will be felt “across the board”

Today, media reports suggest that Australian telco Telstra is preparing to cut “hundreds” of jobs in the coming week.

The report, quoting anonymous sources, suggests that the cuts will be made across the business as part of ongoing cost cutting measures.

The news should come as little surprise. Telstra has been under increasing pressure from investors to cut costs in recent years, with inflation and energy costs cutting into the company’s bottom line. Last year the company cut 2,800 workers in an effort to save up to A$350 million, noting at the time that more job cuts

The financial pressures on Telstra come at a time when the company is increasingly leaning into AI to streamline its operations. Earlier this year, the company announced its ‘Connected Future 30’ strategy, aiming to greatly increase the company’s usage of AI by the end of the coming decade.

“We will embrace AI, as every business will need to, and we expect the pace of change over the next five years to be extraordinary,” said CEO Vicki Brady at the strategy announcement earlier this year.

As part of this transformation process, Brady said that more jobs would likely be at risk due to “AI efficiencies”.

“We don’t know precisely what our workforce will look like in 2030, but it will be smaller than it is today,” she said.

In contrast to these staffing cuts, Telstra’s willingness to bet on the long-term efficacy of AI is clear to see. Earlier this year, the company announced the creation of an AI joint venture (JV) with Accenture, into which it will invest A$100 million annually for the next seven years. The business will reportedly help the operator in modernising its data and AI platforms, as well as capitalising on emerging AI use cases, like AI agents.

Telstra says its ultimate goal is to “rationalise” its roster of AI vendor partners, reducing its data and AI suppliers from 18 companies to just the Accenture JV and a similar JV with Australian AI firm Quantium.

As of December 2024, Telstra had around 31,000 full time employees.

Update: In a statement, a Telstra spokesperson clarified the number of jobs being cut and said that they are not the result of AI implementation, but instead are “largely driven by the ongoing reset of our Telstra Enterprise business”. See the full statement below:

“Today we shared with our employees that we are proposing a net reduction of around 550 roles from across the organisation.

These changes are largely driven by the ongoing reset of our Telstra Enterprise business, as well as improvements to the structure and processes of other teams across our organisation, to reduce complexity, create efficiencies, and respond to changing customer needs.

We are committed to consulting with our people first about the proposed changes. If the changes go ahead we’ll work with the people in the roles that are no longer required to seek to help them find another role at Telstra. If that’s not possible and they end up leaving Telstra, they’ll have access to our redundancy package and a range of support services.

The changes proposed to our team are not a result of our adoption of AI.”