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To: Johnny Canuck who wrote (42799)	11/15/2005 3:02:22 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69927

Telstra to Cut Up to 12,000 Jobs Tuesday November 15, 2:49 am ET Australia's Telstra to Cut Up to 12,000 Jobs Over Five Years in Restructuring Plan SYDNEY, Australia (AP) -- Australia's largest telecommunications company, Telstra Corp., on Tuesday announced plans to cut up to 12,000 jobs by 2010 as part of a major restructuring program that could slash earnings by as much as 30 percent this fiscal year. ADVERTISEMENT Telstra's newly appointed chief executive, Sol Trujillo, said the company's current business model was not working and "a new economic model" was needed to help it compete with its more nimble rivals. "The cost structure of this business is too high ... end of story," said Trujillo, unveiling the results of his four-month companywide review after taking over on July 1. "We're going to be reducing the full-time equivalent head count between six and 8,000 over the next three years and between 10 and 12,000 over a five year period of time," he said. Telstra currently has a work force of 52,000. Management will also invest 200 million Australian dollars ($145.6 million) to train its workers to build and maintain the company's telephone networks, he said. The company's stock fell plunged 6.9 percent to 4.02 Australian dollars ($2.93) on the Australian Stock Exchange. Telstra plans to implement a more streamlined approach to managing operations and delivering telecommunications services to customers, Trujillo told the investor presentation, attended mostly by analysts and media. "We have a chance to make a strong company great," he said. "We will do that by being innovative, by offering integrated services to consumers, by employing market-based management and by being highly competitive." Trujillo, an American, was brought on board to oversee the privatization of the government's remaining 51.8 percent stake in the company. The world's largest share sale is slated for the fourth quarter of 2006 and will be aimed at both local and overseas investors. He said the reforms would involve some short-term pain, and warned that earnings before interest and taxes could fall as much as 30 percent this year as the company pays for staff layoffs and decommissions some assets. That projected earnings drop is significantly more severe than Telstra's September warning that operating profit could fall by up to 10 percent in the current fiscal year ending June 30, 2006. But Trujillo said annual net profit could fall up to 20 percent each year until 2010 if the "status quo" continues and the government fails to implement a "reasonable" regulatory climate. "If excessive regulation doesn't get in the way, we can hit the plan we have laid out today. If it does get in the way, it has the potential to be harmful to our core," he said. Trujillo's new management team and senior lawmakers, including Prime Minister John Howard, have repeatedly locked horns over the government's plan to impose a tougher regulatory regime ahead of the company's full sale. The prime minister moved to reassure Telstra workers, saying they had a good chance of finding new jobs. "We have a very strong economy and the prospects of getting re-employment are greater now than they would have been 10 or 12 years ago when Telstra also had massive retrenchments and when it was fully owned by the government," he told reporters in Sydney. [Harry: It is the same problem internationally. The profit margins are still low compared against historical norms. We are not seeing the 10 to 15 percent growth we have seen in the past. In certain regions the advent of cable, wireless and even power companies into the telecom business is pressuring them from other sides.]