463 employees and 208 contractors working in Telstra’s Global Services division were told on Wednesday that their jobs would start to be sent offshore over the next 12 months.
The Australian job cuts come as Telstra focuses on the Asian region with an aim to source one-third of its revenue from offshore by 2020. Unlike other recent job cuts, the affected workers are highly skilled and are part of Telstra’s booming network applications and services division which recorded a revenue increase of 29 per cent in the six months ending December 2013.
“This proposal would involve outsourcing of functions and services to industry partners in Asia,” Telstra said in a statement. “To compete effectively internationally we need to have resources in the region and the capability to scale rapidly to meet demand.”
“These are not decisions we take lightly and we will consult and work closely with our people on this proposal. If a decision is made to proceed we will aim to redeploy as many affected employees as possible.”
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Over the past decade, Telstra and many other telecommunication companies have shifted the majority of their call centre and technical support services offshore, mostly to Asia. Telstra’s move to offshore 671 highly skilled jobs from one of its highest growth areas of business is a blow to the Australian workforce and, in my opinion, a big risk for Telstra.
Across Telstra’s eight business segments, 37,721 Australians were employed by the company up until the end of 2013. The job cuts announced on Wednesday of 671 workers represents a 1.8% decrease in onshore staff. Since bottoming out in November of 2010 at $2.61, Telstra’s share price has seen a steady increase, hitting a five-year high of $5.45 yesterday.
With the aim to increase offshore revenue to one-third of total company revenue by 2020, it’s clear to me that the board of Telstra doesn’t want to place all its eggs in one basket. Driven by profits, we can expect to see Telstra focusing its employment strategy on building their offshore worker centres in the Asian region, while looking to maintain a steady base in Australia focused on employing only the most essential workers.
What do you think? Does Telstra owe it to Australia to continue employing within the country, or do they have every right to look offshore to hire someone capable of the same job at half the price? If the offshoring of jobs continues, will you look to change telecommunication companies?