SYDNEY • Australia's biggest telecommunications provider Telstra plans to cut a quarter of its contractors in two years, its chief executive officer said yesterday, a reduction of 10,000 people on its payroll and adding to thousands of internal jobs slated to go.

The newly disclosed cuts show the extent of the company's focus on lowering overheads as cut-throat competition and new technology put pressure on its mainstay fixed-line businesses.

The announcement came a week after the former government utility brought forward a plan to cut a quarter of its internal workforce, or 8,000 jobs, and forecast a A$500 million (S$478 million) write-down on its ageing data storage assets.

Telstra CEO Andy Penn said at an investor conference: "Over the past year, we have also reduced our indirect workforce by 5,000 and we would anticipate reducing this further by over 25 per cent in the next two years."

He did not specify the number of jobs, but a Telstra spokesman referred to Mr Penn's comments earlier this year when he said Telstra had 40,000 "industry partners who provide technology, consultancy and other services".

"The human dimension of these numbers is very challenging," Mr Penn said in the speech yesterday.

Telstra announced its job-cut plan last June. Last week, it said it would have shed about 6,000 internal jobs, from 8,000 jobs it plans to cut, by the end of the financial year to June, bringing forward A$200 million in restructuring costs.

The telco added that it would take another A$350 million in restructuring charges in the following financial year.

Telstra shares closed up 2 per cent yesterday, while the broader share market was up 0.2 per cent.

REUTERS