Telstra has announced it will record $500 million in impairments in its FY19 results as it writes off its legacy IT assets, and increased its forecast annual restructuring costs due to expedited job cuts.
Like other legacy telecom firms around the world, Telstra is finding it hard to battle cutthroat competition and new technology that has crushed its mainstay fixed-line businesses.
In a push to cut costs, the telco last year said it would shed 8,000 jobs from a workforce of 32,000.
About 6,000 of those cuts are likely to happen by the end of the financial year, it said in a statement.
That will result in a $200 million increase in total annual restructuring costs, which it now forecasts to be around $800 million, the company said on Wednesday.
It also said that post financial year 2019, restructuring costs related to its T22 initiatives are likely to be about $350 million.
Chief executive Andrew Penn said the financial impacts brought forward into FY19 were the natural result of T22, the company’s transformation program.
“We understand the significant impact on our people and the uncertainty created by these changes,” Mr Penn said in a statement on Wednesday.
“We will continue to see role reductions as we replace our legacy systems, digitise and simplify how we work, and respond to things like declining NBN and call volumes, but if a final decision is made on the proposal announced today we expect the majority of our T22 restructure will be behind us.”
Shares in the company were worth $3.56 before the open of trade on Wednesday having gained 25 per cent so far this year, but the company is still trading 46 per cent below the 18-year high of $6.61 in January 2015.