The timing couldn’t have been more unfortunate. Last week, communications giant Telstra announced it had hired software firm Infosys to automate more of its software engineering capabilities and accelerate its use of artificial intelligence.
Telstra boss Vicki Brady Credit: Ben Symons
Then, on Tuesday, it said it would have to cut 9 per cent of its workforce. The proposed mass redundancies at one of the country’s biggest employers are a shock but also raise community fears about the future of jobs in the face of the rise of AI, even though Telstra said the losses were unrelated to machine learning.
Telstra revealed its plans to dump up to 2800 workers by year’s end as part of its latest cost-cutting measures. The redundancies are aimed at improving a poorly performing division. However, that has not stopped the man versus machine headlines.
The first jobs to go are 377 consultants’ positions within Telstra Enterprise which provides high-priced IT services (cybersecurity, cloud services, backups) to businesses. Telstra chief executive Vicki Brady said further redundancies would be announced over the coming months. The telco expects the cuts will save $350 million.
Telstra has a workforce of about 31,000 people, and the company had foreshadowed cuts were coming. Last February, Telstra started a detailed review of the domestic enterprise business after reaping the benefits of rising prices, a bumper profit and strong mobile business growth. Income for the half-year rose to $11.7 billion, a 1.2 per cent increase from the same half in the previous year. Net profit after tax was $1 billion, up 11.5 per cent from the same half in the previous year.
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Brady told a press conference on Tuesday the cuts would have no impact on customer service teams, but there were parts of Telstra’s business that were not delivering to expectations. “We have to make significant ongoing investments in our infrastructure, our technology and our services to deliver what our customers need today and into the future,” she said. “The actions we are announcing today are difficult, but they are necessary. We need to be a more efficient and sustainable business.”
As part of the redundancy announcement, Brady also revealed Telstra would drop controversial inflation-linked price increases from its post-paid mobile plans, meaning there would be no price rise on July 1 for some customers.
Earlier this year we suggested Australia would soon start to feel the impact of artificial intelligence. Much like the launch of the World Wide Web in 1993, AI comes with very obvious and immediate benefits as well as potential drawbacks. The Albanese government acknowledged the upside, estimating that adopting AI and automation could add an extra $170 billion to $600 billion a year to Australia’s GDP by 2030.