Telstra is to cut up to 12,000 jobs, almost a quarter of its workforce, in a massive reorganisation.

At the same time Australia's former monopoly telco is invest AUS$10bn ($7.3bn) in an IP network, of which $2b-3bn is new money. The company is also abandoning plans to pay shareholders a special dividend of AUS$1.5bn ($1.1bn), diverting the cash instead to restructuring.

The massive efficiency drive will also see replace its CDMA mobile phone network with what it calls a 3G GSM network.

Telstra is in no hurry to fire everyone just yet: it plans to cut 5,000 - 8,000 jobs over three years and 10,000 jobs over five. But it is in more of a hurry with its technology overhaul, aiming to have an IP core for its network in place by 2007.

Other efficiencies sought include the reduction over three years of the number of network platforms - currently standing at 330 - by 60 per cent, and also of business and operational support systems - currently 1,200 - by 75 per cent.

Telstra press release ®

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