The jobs to be cut are in senior management, middle management and professional services, Telstra Corporation Ltd. said in a statement.

Customer-facing jobs will be unaffected. Telstra chief executive Sol Trujillo said the company was taking advantage of new database and systems capabilities which enabled it to reduce duplication and bureaucracy and improve cooperation between divisions.

'In November 2005, we announced every part of our business would be transformed to make it more productive and customer focused, including a large reduction in our work force,' Mr Trujillo said in the statement.

'This announcement is part of Telstra's overall strategy.'

The affected employees are based mainly in Sydney, Melbourne and Brisbane. Just before the announcement, shares in Telstra were down 1.45 per cent to A$4.08 as Australian shares were sold off amid the continuing credit crisis.