news One of Telstra’s main unions has heavily criticised the company for a reported plan to send as many as 1,000 jobs offshore in yet another round of offshoring at the telco, stating that Telstra isn’t treating its Australian workforce fairly in the context of its ongoing profit growth.
This month Telstra announced that its profits for the six months to the end of December grew 8.8 percent to $1.6 billion, although its revenues grew only slightly in that period. The company is making solid gains in the mobile sector, where it is still growing strongly, taking customers away from competing telcos Optus and Vodafone as it leverages its superior mobile networks.
However, the news came as the company appears set to conduct another offshoring round. Telstra has avoided sending Australian jobs offshore in the past, but has conducted substantial offshoring initiatives under current chief executive David Thodey. The Financial Review reported this month that the telco could could outsource as many as 1000 jobs to the Philippines and India following a review by two management consulting firms that is due to be completed by the end of next month.
In a statement responding to Telstra’s offshoring plans, Michael Tull, the national president of the Community and Public Sector Union (CPSU) said: “Today’s profit results confirm that Telstra workers are delivering great outcomes for the company and for its customers. However, rather than reward staff for their efforts, Telstra executives are slashing another thousand Australian jobs and sending work offshore.”
“There is growing alarm about job losses in many sectors of the economy right now. Australians are increasingly uneasy that extremely well-paid Telstra executives are being rewarded for putting thousands of mums and dads on the dole and then sending their jobs overseas. They are also uneasy that the federal government is doing nothing to stop this happening.”
“Telstra has made over $3 billion profit every year for the last five years. It remains Australia’s leading telecommunications company with over 15 million mobile customers. This is a strong business but it needs to look after the workforce on whom its profits are built and the Australian community whose strong support has allowed it to prosper,” Tull added.
According the union, Telstra announced over 2,000 job cuts last year and based on analysis of Telstra’s business plan, anticipates job cuts in 2014 to be even higher .
Tull said: “The scale of job losses and offshoring in Telstra is an issue for the whole community. Around a third of Telstra work is done overseas by outsourced providers and this figure is climbing every day. Telstra executives need to be accountable for the thousands of Aussies they are putting out of work.”
“We need new obligations on employers like Telstra, to build the skills and increase the employment security of Australian telecommunications workers. And finally the Government needs a plan that encourages companies like Telstra to maintain its Australian workforce. With billions of public money going to Telstra through the NBN and other government contracts, Australians expect Telstra and the Government to stand up for Aussie jobs.”
Regular readers of Delimiter will know that from a political standpoint, I hold economically conservative but socially liberal views — thus, I am largely against government intervention in the private sector and against government intervention in people’s private lives. I am a journalist, after all — but I’m also a small business owner.
In this sense, I am forced to say that I don’t agree with the comments made here by the CPSU. Realistically, Telstra is a private company operating in one of the more capitalist economies in the world. It competes directly with telcos like Optus, Vodafone, TPG and iiNet, all of which have substantial offshoring operations.
If Telstra did not offshore jobs the way it is, it would find itself unable to compete as strongly with those companies. There is absolutely no need for Telstra to keep jobs in Australia the way the union is claiming. For there to be a level playing field in the telecommunications sector, Telstra must be unrestrained in terms of its offshoring operations.
Of course, as many people will subsequently point out, there is no level playing field in Australia’s telecommunications sector, as Telstra enjoys other advantages over the other telcos courtesy of its history as an incumbent. I agree, and in those areas — such as providing access to much of its fixed-line telecommunications infrastructure — Telstra should mostly certainly be restrained, to allow those competitors to compete. But keeping jobs onshore is not one of those areas.
Telstra should be able to do as it likes — and indeed, it’s easy to argue that Thodey has a responsibility to the company’s shareholders to cut costs in this area as much as possible, while still ensuring the right levels of service. If customers don’t like the levels of service they will see as a result, then they will be free to jump ship to a rival provider. That’s the nature of market competition.
Is all of this unfair to Australian workers? Well, I think the question is somewhat redundant. “Fair” is not a concept which has much traction in capitalism. At a basic level, those workers were selling their services to Telstra. Telstra does not “owe” them a job — it is their job to convince Telstra that they have a service it should buy. If the company no longer needs to buy those services, then those workers should examine their situation and find another company which does, or upskill. It’s a tough concept — but Australia does also have a social welfare system safety net that can stop people starving until they can work their situation out.
Image credit: Telstra