Telstra Share Price Rises on New Management Structure

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Telstra Corporation [ASX:TLS] shares are up 1.27% today, following the reveal of its new organisational structure and leadership team.

The telco giant’s shares are currently trading at $2.79, down $1.54 from its 52-week high.

This announcement is only the first step in Telstra’s plan to significantly shrink the company in size and create a more streamlined and simplified process.

Who is Telstra’s new leadership team?

As a part of the Telstra2022 strategy, the company announced three external hires, including Michael Ebeid, the recent CEO of SBS, and Nikos Katinakis, former senior executive at Optus. The third external hire is yet to be revealed.

Mr Ebeid will join the team to run the Enterprise team servicing both Australian and international business along with government customers.

Mr Katinakis will be leading the networks and IT with a focus on extending the company’s network superiority.

Among the changes, former Chief Financial Officer Warwick Bray, Chief Technology Officer Stephen Elop, Head of Telstra wholesale business Will Irving and Head of Media Joe Pollard were all cut.

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CEO of Telstra Andrew Penn said that these changes will ensure the company can continue to deliver market leading innovation in networks.

At the heart of these changes is the simplification of our products and services built on new technology. By mid-next year we will have fully rolled out our market leading products and services. To help deliver these changes, we are announcing a new end-to-end products and technology division of Telstra. It means we will significantly increase our technical capabilities around product development and management.

Ultimately the simplified and streamlined structure will remove duplication, hierarchy and silos across the organisation. It will help us improve the service that we provide to our customers, the efficiency of the business and our competitiveness, as well as increase our productivity and reduce costs.

The significant changes to the leadership team will be effective as of 1 October 2018.

What can we expect to see from Telstra in the coming months?

Mr Penn has noted that the Telstra2022 strategy is a multi-year transformation, and that teams will be impacted at different times at varying degrees.

We are fundamentally re-engineering how Telstra operates, and our new organisational structure and operating model are designed to remove complexity and management layers, decrease the focus on hierarchical decision-making and increase the focus on empowered teams making decisions closer to the customer.

Telstra have been extremely upfront with their intent to downsize, previously stating that one in four management roles would be axed — so we can expect to see a lot more of a shakeup. But realistically this transformation is not only for the survival of the company, but the benefit of its shareholders…so it’s no surprise that the telco’s share value rose after today’s update.


Dannielle Rawlings

For Money Morning

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