Telstra has unveiled a major overhaul of its internal operations, a decision it concedes is likely to lead to further cuts to its 30,000 strong domestic workforce.
The telco's chief operations officer told staff on Wednesday the company would reorganise its operations, which house roughly half of its Australian employees, into five new divisions to "continually improve how we serve our customers" and support future business needs.
"Our traditional businesses are coming under increasing margin pressure and the largest portion of our budget is spent supporting them," he said in an internal email obtained by The Australian Financial Review.
"This is not a sustainable business model and we have an obligation to redefine our contributions to Telstra."
Mr Riley later told a conference call with journalists that "jobs will go in certain areas."
"Overall it's likely. We have continue to drive productivity across the business," he said.
Under the new model, Telstra's operations will be streamlined into five groups: IT solutions, networks, customer service delivery, NBN and NAS (network applications and services).
Telstra Corp cut about 700 jobs from its struggling Sensis division in February.
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