Telstra will cut hundreds of jobs from its ailing Yellow Pages Sensis business, just two weeks after the telco posted a record half-yearly results of $1.6 billion.
Sensis managing director John Allan said in a statement late this morning that a total of 648 jobs would be cut as part of a proposed restructure to the company's operations and business model.
Mr Allan added that none of the decisions were taken lightly, but were part of the company's digital transition.
“Until now we have been operating with an outdated print-based model – this is no longer sustainable for us," Mr Allan said.
"As we have made clear in the past, we will continue to produce Yellow and WhitePages books to meet the needs of customers and advertisers who rely on the printed directories, but our future is online and mobile where the vast majority of search and directory business takes place."
Cuts and offshoring
The restructure would see job losses for about 391 back-room and customer service staff, and some roles outsourced, Sensis said. The company employs a total of 3500 staff.
A new digital customer management centre would also be set up, with 50 new jobs created.
Mr Allan said the changes would accelerate his company's shift towards future digital growth.
'Bombshell on staff'
Prime Minister Julia Gillard described Telstra's decision as ''dreadful news''.
''Really dreadful news particularly for the staff members who are hearing that today. It's always incredibly tough when someone loses a job,'' Ms Gillard told Adelaide's 5AA.
The Community and Public Sector Union criticised the decision, saying it was "extremely disappointing".
''The union condemns the dropping of this bombshell on staff,'' CPSU national president Michael Tull said. ''We've been asking the company for information in the last six months about the future direction and no one has been forthcoming.
"Sensis staff have been crushed by the scale of these cuts for a company that is part of Telstra which earlier this month posted record half year profits of $1.6 billion," Mr Tull added.
The company’s struggling Sensis business has been under pressure in the recent years as demand for print advertising slumps. Income from Sensis fell by 12.5 per cent, according to Telstra's half-yearly results.
At a media briefing two weeks ago, the Telstra chief executive David Thodey said Sensis would continue to be restructured as it moves ''from a print to a digital business''.
Sensis appointed digital media executive Jeremy Birt as its new executive general manager on January 30, with a brief to oversee the company's print and digital operations.
The company also acquired True Local in January and indicated the online directory would be added to its Yellow Pages network. The deal was subject to ratification by the Australian Competition and Consumer Commission.