Telstra Corporation Ltd [ASX:TLS] is the country’s largest telecommunications company. Closing at $3.06 at the time of writing, the Telstra share price is down 23.69% from the high in August 2019, on the back of COVID-19.
The global pandemic of COVID-19 has given rise to a situation where vast amounts of people are having to work from home, this puts a heightened importance on the need for communication across all formats.
Back in June, Telstra announced it had cut 6,900 of the 8,000 job cuts it had flagged to reduce underlaying fixed costs by $2.5 billion annually, by FY22. These job cuts have been put on hold for six months.
Everything has changed now with the onset of the COVID-19 pandemic.
What’s happening with Telstra…
In mid-March Telstra started a recruitment drive to onboard 1,000 temporary staff in response to the pandemic. This was due to the call centres in the Philippines being forced to shut down.
In an address to shareholders, Telstra CEO Andy Penn noted:
‘COVID-19 is having a profound impact on businesses across the country. We are supporting our customers as they shift to working and studying from home, and clearly telecommunications plays a critical role in all aspects of peoples’ lives and the economy.’
Where to from here for the TLS share price
Since mid-March Telstra has secured $940 million in extra banking facilities, this is to help the company in the current climate. Having to do somewhat of a 180, going from cutting down on staff to having to recruit very quickly to deal with the COVID-19 crisis. Telstra has not fallen as much as could have been expected.
On the charts the price fell to the historical level of $2.92, which looks to of held up any further decline. For the last six weeks the price has moved sideways on average volume. At this stage with so many changes across the company and society that Telstra is dealing with, having stability in their share price can only be a positive.
Should the price start to move to the upside again, the level of $3.37 may come into focus. $2.92 looks to be holding steady at this stage on the downside.
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For Money Morning