Australian telecom giant Telstra to cut 8,000 jobs

Updated 20 June 2018
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Australian telecom giant Telstra to cut 8,000 jobs

SYDNEY: Australia’s dominant telecommunications company Telstra Wednesday announced plans to axe 8,000 jobs — a quarter of its workforce — as part of a drastic new strategy to cope with an increasingly competitive industry.
The decision by the company, one of Australia’s largest employers, is part of a shake-up targeting an extra Aus$1 billion ($750 million) in cost-cutting by 2022, on top of Aus$1.5 billion previously announced.
To create a leaner operation, it will also split its mobile and infrastructure divisions into separate businesses.
“We are creating a new Telstra that is able to continue to lead the market,” said chief executive Andrew Penn.
“In the future our workforce will be a smaller, knowledge-based one with a structure and way of working that is agile enough to deal with rapid change.
“This means that some roles will no longer be required, some will change and there will also be new ones created.”
The cuts come less than a month after Telstra said its 2017/18 earnings will likely be at the bottom of its guidance range of Aus$10.1 billion to Aus$10.6 billion, blaming increasing competition in mobile and fixed broadband.
The warning sent its shares tumbling to a more-than six-year low of Aus$2.71.
Telstra employs 32,000 people across 20 countries, according to its most recent annual report. Of the jobs to go, one in four will be executive and middle management roles.
Penn said the company had to take action to stay on top in a highly competitive market.
“The rate and pace of change in our industry is increasingly driven by technological innovation and competition,” he said.
“In this environment traditional companies that do not respond are most at risk.
“We have worked hard preparing Telstra for this market dynamic while ensuring we did not act precipitously. However, we are now at a tipping point where we must act more boldly if we are to continue to be the nation’s leading telecommunications company.”

Telstra has a range of businesses including fixed broadband, mobile, data and IP, network application and services, digital media and international.
Part of its new strategy will see it create a wholly-owned standalone infrastructure business unit from July 1.
Called Telstra InfraCo, it will comprise the telecom’s fixed-network infrastructure including data centers, non-mobiles related domestic fiber, international subsea cables, exchanges, poles, ducts and pipes.
Its services will be sold to Telstra, wholesale customers and Australia’s National Broadband Network, controlling assets with a book value of about Aus$11 billion.
“As technology innovation is increasingly relying on connectivity, the role of telecommunications infrastructure is becoming more important,” said Penn.
“There is virtually no technological innovation happening today that does not rely on a high-quality, reliable, safe and secure telecommunications network.
“In this world our infrastructure assets are becoming more valuable. By creating a new infrastructure-focused business unit we will better optimize and manage these assets.”
Telstra also intends to “monetise assets of up to Aus$2 billion over the next two years to strengthen the balance sheet,” and has set aside Aus$600 million in restructuring costs.


Danske Bank money laundering ‘giga scandal’ spreads to Britain

Updated 11 min 57 sec ago
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Danske Bank money laundering ‘giga scandal’ spreads to Britain

  • By 2013, the number of UK-registered customers in the branch’s non-resident portfolio had topped 1,000
  • Danske Bank Chairman Ole Andersen said that the lender had made an assessment of whether it violated any US laws
LONDON/COPENHAGEN: Danske Bank’s money laundering scandal spread on Friday as Britain’s National Crime Agency (NCA) said it is investigating the use of UK-registered companies.
“This is a giga scandal,” European Union Competition Commissioner Margrethe Vestager said, joining a growing chorus of calls for a clampdown on the billions of euros which are alleged to have been “washed” through European banks.
An NCA spokeswoman said the British agency was working with partners across government to restrict the ability of criminals to use UK-registered companies in money laundering.
British and Russian entities dominate a list of accounts used to make €200 billion ($236 billion) in payments through Danske Bank’s branch in Estonia between 2007 and 2015, many of which the bank said this week are suspicious.
By 2013, the number of UK-registered customers in the branch’s non-resident portfolio had topped 1,000, Danske Bank’s investigation revealed, ahead of clients from Russia, the British Virgin Islands and Finland.
As the scope of the alleged money laundering through Danske Bank has widened, investor concerns over the potential penalties it could face have increased, with particular focus on what action if any US authorities might take against the bank.
So far, the US has not said whether it is investigating, although Danske Bank Chairman Ole Andersen said that the lender had made an assessment of whether it violated any US laws. He has declined to share the bank’s conclusion of this.
“We need to do more to prevent money laundering from happening,” Vestager told reporters in Copenhagen following the resignation on Wednesday of Danske Bank CEO Thomas Borgen after an investigation commissioned by the bank exposed past control and compliance failings.
Borgen, 54, was in charge of Danske Bank’s international operations including Estonia between 2009 and 2012.
He said on Wednesday that he had been “personally cleared from a legal point of view” while Danske said its board had not breached their legal obligations.
The European Commission last week recommended banking supervision changes, including bolstering national authorities, but stopped short of setting up a new financial crime agency called for by the European Central Bank.
In a sign of the growing pressure on Danske Bank, which already faces criminal inquiries in Denmark and Estonia, the chief executive of CARE Danmark said on Twitter that the Danish charity had decided to end its relationship with the lender.
International aid charity Oxfam also called on Danish municipalities to cut ties with the bank, saying it has not been able to re-establish the trust of Danish citizens.
The mayor of Aalborg, Denmark’s third largest municipality, said he would discuss its partnership with Danske Bank at the next municipality committee meeting, but noted that there were only two banks in Denmark would be able to handle a municipality its size.
“Danske Bank has been involved in money laundering which is deeply reprehensible and outrageous but Nordea has been involved in tax havens, so the entire bank sector needs to clean up for us to have a trusting collaboration with the banks,” Thomas Kastrup-Larsen said.
Danske Bank’s tiny Estonian branch accounted for as much as 10 percent of group profit during the period when suspected money laundering was conducted via its operations there.