Telstra cuts 651 jobs in offshoring move


news The nation’s largest telco has revealed it will cut some 651 Australian jobs in areas such as customer support, with some of the work to be absorbed by other workers locally and some to be offshored to facilities in countries such as the Phillipines.

In a statement released this week, the telco revealed it would close two customer contact centres in the rural centre of Lismore in NSW and part of its facility in Townsville, Queensland, with the calls “being absorbed by other Telstra and FOXTEL contact centres”. Additionally, “back of house voice and broadband testing functions”, which the telco currently performs in Melbourne and Sydney, will be absorbed into other facilities in Townsville and Perth.

“Some of this work will also be undertaken by existing partner contact centres offshore,” the telco said. Telstra said that if its proposals proceeded, some 180 jobs would be lost in its Melbourne and Sydney facilities, with a further 126 roles in Townsville and 116 in Lismore. A number of additional contractor roles will also be lost.

“We operate in a fast moving, highly competitive market,” the telco said. “To keep pace with this changing environment and remain competitive, like every business we’re constantly reviewing the way we work to identify opportunities to improve customer service and simplify our business.

“Specifically call volumes have declined more than 20 per cent over the last twelve months and are anticipated to continue to decline over the next few years as more customers move to online and use our various self-serve options. In fact, 30 per cent of our customers now use online transactions. As a result, we believe we need fewer contact centres in the future. We’re also a changing business, with some parts of the business shrinking and other areas growing due to changing technologies and customer trends. As we have seen in recent times, this has meant adding staff in growth areas while reducing staff in others, and this evolution will continue.”

Part of the stimulus for the changes has also come through recent changes to Telstra’s contract with its joint venture partner FOXTEL, where after-sales service for FOXTEL by Telstra customers will now be performed by FOXTEL. This particularly affects Telstra’s Lismore contact centre.

The company said that all affected staff would be invited to apply for roles in other parts of Telstra. “Successful applicants will be provided with additional assistance for relocation costs,” the telco said. “We will also work closely with staff and the local community, to see if there’s other redeployment opportunities, along with helping with CV writing and interview training, financial advice and generous redundancy provisions.”

The news was immediately met with heavy criticism from union representatives, with the Communications Workers Union, for example, telling the ABC that it was only notified of the 651 job losses after the cuts had been made, and that it was concerned about offshoring in Telstra’s operations.

In many respects I can’t help but see this move as a positive one, in that it reflects the fact that Telstra is fundamentally changing its nature from a company which used to do all customer support via telephone, and now provides a substantial amount of self-service options online, which rivals such as iiNet, for example, have offered for years. Telstra’s online self-service portals aren’t quite up to iiNet’s standards yet, but they’ve made a great deal of progress on this issue since the company’s chief executive David Thodey took the reins several years ago. And naturally, as this happens, call volumes are going to go down.

In addition, it’s also a fact that virtually every major Australian corporation employs offshore staff for contact centre operations. Telstra is merely one of the last major corporations to cut its costs in this manner — iiNet and TPG, for example, have operated offshore call centres for years. Call centre work is tough work and always the first to get outsourced overseas — I don’t think this would have come as a colossal surprise to those in the industry. And a fitter, leaner, healthier Telstra is a good thing for Australia in general. This is the nature of capitalism — work goes where it can be done most efficiently.

However, it is also a very sad day for those staff affected by the Telstra culls, and I wish them the best of luck finding new roles. I’ve gone through a redundancy or two myself in my years in the IT industry, so I know what it’s like. Telstra is still a huge corporation, so I hope many of the affected staff can find roles in other divisions. If not, unemployment is still low in Australia, so I’m sure something will eventually turn up — even though it might not be in a rural area like Lismore or Townsville and might involve moving.

Image credit: Telstra


  1. Yeah, initially quite skeptical about the move, but the stated reasons (call volumes, and reassignment of FOXTEL support to FOXTEL) appear reasonable really.

    Sad that people have to lose their jobs over it.

  2. I went through this several years ago when my job was offshored to the Phillipines.

    I feel sorry for anyone who has to deal with them. On the whole they are vastly incompetent, have no affinity with Australian people, are hard to understand, they are hard of hearing with even middle strength Australian accents, and they are only good for reading directly off the Telstra support guidelines and cause further problems with their inability to go offscript or to even recognise basic problems.

    The reasons are bullshit. They always are. The only thing that matters is that they work for peanuts.

    And we know what happens when you pay peanuts. You get elephants.

    • i agree with you bob. I always groan on the inside when they answer my call. you just know it won’t get resolved (probably).
      the latest trick the telstra overseas phone answerers are using is to not hang up the call at the end of the conversation if you sound like you’re not too pleased, that way you have to hang up first and miss the opportunity to fill in telsta’s satisfaction survey.
      well it happened to me once anyway.

  3. Amazing. The main reason for the decline in calls may well be due to the time it takes to go through the process of selecting the service required from a menu and the time it takes waiting to be put through to a “consultant”. I suggest that many people get frustrated and give up and then resort to trying use the on line services. This can introduce more delays in solving problems (that assumes that the customer still has access and it is not part of the problem). I feel sorry for the more elderly customers and those who might not be as technically or computer savy.

    Anybody who has waited as long as half an hour to speak to a consultant and then been diverted to someone else or has had to wait for several days for a problem to be resolved will attest to this

    The use of off shore call centres may be cheaper but langauge (accents) and security of information are an issue of concern and detrimental. Off shoring services keeps the customer at arms length from the parts of Telstra that provide the actual services. The lack of local knowledge and inadequate interfaces back into Telstra has caused a significant lowering of customer service standards.

    Finally, many of the people who are laid off will become Centrelink customers at a cost to the tax payer. Surely it would be better to find a way of encouraging the likes of Telstra (and others) not to take up off shore options. This would have several benifits such as avoiding the consequential social costs, the loss of income tax revenues from those that become unemployed and the impact on the local economy.

  4. It was weird when I was with Telstra many moons ago, I phoned for support and got someone from overseas and prior to that I have never had a telemarketer phone call, literally the next day after the support call I was getting them once a day. Not sure if coincidence or I’m just paranoid :| Anyway, sad news for those who lost their jobs.

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