Telstra plans to send 170 jobs from one of its fastest-growing divisions to India.
The telco announced it will start shifting the jobs from its Network Applications and Services (NAS) division by October, pending discussions with employees.
NAS provides cloud-based IT services to businesses.
NAS head David Burns said the job cuts would affect staff in all capital cities.
The jobs involved were not customer service jobs but covered "back-office functions", Mr Burns said.
While NAS was a successful unit, the job shifts were part of a growth plan for the business, he said.
Asked why the jobs could not be done in Australia, Mr Burns said the move was about growth, supporting clients offshore and being able to respond to growth quickly.
"We need to be able to support our customers as they move into that South-East region and we need to be competitive as we do that," he said.
"Accessibility to deep pools of talent and the ability to respond to our customer requirements is a fundamentally important component of this services business."
Industrial relations was not an issue in the decision, Mr Burns said.
Telstra announced its plans to staff on Tuesday and Mr Burns said the company was consulting with affected staff before making a final decision.
"We want their input into our strategy," he said.
NAS achieved 11 per cent growth in revenue to $636 million in the first half of 2012/13, accounting for five per cent of Telstra's revenue.
The business is one of Telstra's strongest growing divisions and has customers including Jetstar and Fitness First.
NAS recently secured a $1.1 billion Defence Department contract and Mr Burns said the Defence contract would be met only with local staff.
He said NAS has added 146 staff in Australia in the last financial year and would hire 350 people under the Defence contract.
Telstra shares were down 2.5 cents to $4.765 at 1452 AEDT.
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