The Guardian March 15, 2000

Dismembering Telstra

by Marcus Browning

Telstra's announcement that it will cut a further 16,300 jobs is part of 
the Howard Government's strategy to privatise the national 
telecommunications service provider. The Government knows its legislation 
to privatise outright the remaining publicly-owned 51 percent of Telstra 
will be blocked in the Senate.

The tactic is instead to break Telstra up piecemeal by selling its most 
profitable sections and, where necessary, contracting out its various 

In this way Telstra as an integrated whole is being dismembered, creating a 
group of small, isolated service providers that will eventually be dwarfed 
by the likes of Optus.

Widespread staff reductions are central to this break-up strategy, with 
last week's announcement bringing the number of redundancies to almost 
38,000. A large number will come from the closure of Telstra call centres, 
many of them in country centres with high levels of unemployment.

At the same time as the government-appointed Telstra chief executive, Ziggy 
Switkowski (the former head of Optus), dropped the jobs bomb he also 
revealed that Telstra has had a record profit year, $2.09 billion, and that 
its Network, Design and Construction (NDC) division was up for sale.

NDC specialises in telecommunications infrastructure and was set up last 
year, not primarily as means to develop and advance Telstra's technology, 
but to gain contracts in the private sector. It now has a $1 billion sales 
tag with the likes of construction giants Leighton or Transfield expected 
to be given the nod in the bidding.

The Communications, Electrical and Plumbing Union pointed out that job 
losses would hit rural areas early with the closure of call centres.

"We warned last year that Telstra was moving to close many of its call 
centres", said the union's Communications Division President, Colin Cooper, 
"but the company kept denying it had any specific plans to do so. Now they 
have identified this as a key area for cost savings."

He said that most of the employees who worked at the call centres were 
women who would find it especially difficult to gain other employment.

The union had also forecast the NDC sell-off. "We have always anticipated 
that Telstra would float part or all of NDC, and that they would choose a 
moment when the share price needed to be shored up. That's what we're 
seeing now."

Mr Cooper stressed that the further loss of staff would inevitably effect 
service standards. "There is a limit to what you can achieve through 
automation and working staff harder.

"Telstra's customers know this already through the decline in service 
standards that has occurred since the big job cuts began."

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