Telstra halts job cuts, suspends late fees
Telstra has frozen its job cutting program for six months, suspended late payment fees and disconnections, and has invited stood-down Qantas employees to apply for 1,000 temporary jobs to help virus-proof the economy.
The telco giant said it is also bringing forward $500 million capital expenditure from FY21 to increase network capacity during the pandemic, and help accelerate the rollout of its 5G network.
Chief executive Andrew Penn said while the virus would likely have an impact on the company's balance sheet going forward, it was important for big business to "show leadership and contribute to the national response".
"Like many businesses it is expected to be material and will depend on how the situation and its impact on the economy and our customers evolves," Mr Penn said.
"While it is critical we maintain a strong position we also believe there are a range of additional initiatives we can undertake now to help support the broader economy."
Telstra said small businesses and consumers unable to pay their bills would not be charged late fees or disconnected until at least the end of April, at which point the company will review further.
These measures are in addition to unlimited data allowances on fixed broadband and extra mobile data for Telstra's consumer and small business customers, as well as extra paid leave for Telstra employees and casuals.
The 1,000 temporary staff hires will help the company handle a spike in call centre volumes.
Telstra has invited Qantas workers to apply.
Travel bans have grounded much of the the airline's fleet, and two-thirds of workers have been stood down.
Mr Penn said his company will continue its productivity program to reduce underlying fixed costs by $2.5 billion annually by the end of FY22 but will not cut jobs for the next six months.
At its first-half results last month Telstra said it had cut 6,900 of the 8,000 net jobs first flagged in June 2018.
The virus outbreak and government-imposed travel bans have had immediate consequences for the telco.
There are fewer customers overseas to use international roaming, and business customers have postponed projects.
Chief financial officer Vicki Brady said the latter would affect the carrier's professional services arm.
Telstra is fast-tracking improving network capacity to help the many people working from home.
This has shifted much demand to its retail network.
Telstra's current outlook remains within the range of its FY20 guidance, which it changed in September to reflect the delay in peak headwinds from the National Broadband Network rollout to FY21.
The FY20 outlook is, however, at the bottom end of the range for both free cash flow and underlying earnings, and the bottom end of the $0 to $500 million range for growth in underlying earnings, excluding the in-year NBN headwind.
Telstra shares lost 2.29 per cent to $3.19 by 1322 AEDT and are down nearly 10 per cent for the year.
In comparison, the wider share market has fallen by more than a third in that time and some retailers, airliners and travel firms have shed even more amid tightening quarantine measures.
A slew of other companies have withdrawn earnings guidance and delayed or scrapped dividend payments as they brace for a virus-driven economic recession.