Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Telstra chief executive denies that proposed job cuts to telecommunications staff will reach 30,000

TONY EASTLEY: The Managing Director of Telstra, Frank Blount, has rejected reports of secret plans developed inside his organisation to cut 30,000 staff and to oust Mr Blount himself from the top job. The alleged secret internal document also details plans by senior officers at Telstra to appoint a new board in readiness for privatisation. But Mr Blount denies this and he also rejects reports that Telstra's March quarter results are expected to be disastrous.

In Canberra, a short time ago, Mr Blount spoke to reporters, including the World Today's Catherine Job.

FRANK BLOUNT: [...] but I saw that in the paper, this morning. I'm not going to quote the numbers, but we're substantially on target for this quarter. We just got the March results this past week. And we have some softness in revenue. Our expenses are actually running under budget, so they just about offset each other. And so we're on track, in March. So that's just .. that's not reported accurately.

CATHERINE JOB: Mr Blount, were you aware of these secret plans that have been reported, this morning, about shedding 30,000 jobs and, indeed, yourself?

FRANK BLOUNT: No, I was not. In fact, I was just commenting to somebody earlier: the company has leaks like I've never seen a company have internal. I can't imagine a secret plan being developed without not everybody knowing about it, because we tend to leak everything, it seems to me. But, no, there's no knowledge of me about any plan like that, and I've never seen any numbers like that.

CATHERINE JOB: Well, I suppose if they were plotting to oust you, you wouldn't know about it.

FRANK BLOUNT: Oh well, I suppose not.

CATHERINE JOB: How much credibility does the plan have?

FRANK BLOUNT: It doesn't have any credibility in my mind, because I haven't seen what backs it up and I don't know what time frame it's talking about. And I think we've probably said enough about it, because I don't think the plan exists.

CATHERINE JOB: What about the idea of cutting 30,000 people, shedding 30,000 jobs? Does that have any more credibility?

FRANK BLOUNT: No, it doesn't. Not in my mind it doesn't. I think that's over the top, and even over a period of time that's over the top.

JOURNALIST: Will you be culling staff?

FRANK BLOUNT: Yes, I've already said that. I've said that to staff in a newspaper article that I published internally to the staff, this week .. excuse me, last Friday. It's called 'Our Future' - front page article that I wrote myself. And then on the 7.30 Report, last night, I said the same thing....

JOURNALIST: Fifteen thousand jobs?

FRANK BLOUNT: ...but I did not say a number; never said a number.

JOURNALIST: Surely staff would like to know a number.

FRANK BLOUNT: As soon as we know, we'll tell the staff. I don't know yet. As I told the Minister this week and as I told 7.30 Report last night, we're now developing the three-year corporate plan, which rolls over every year, which has to be submitted to the Government some time in the next two months. We won't know what those numbers are over the next two or three or four years until we get that plan put to bed, and that won't be for another .. probably another month.

JOURNALIST: There seems to be a trend where companies downsize, they cull staff, in the name of economic leanness, but executive salaries go up and up and up.

FRANK BLOUNT: Well, I don't think that's necessarily true. If you go back and check the records here, in Australia, I don't think you'll see that to the degree that you see it maybe in some economies like North America.

JOURNALIST: One hundred and thirty-five per cent blow-out in the last 10 years, in Australia, for executive salaries.

FRANK BLOUNT: Well, obviously you have the data I don't have, but the point is I believe we do have to get more lean. I think everybody .. I mean, all Australian industry has to, not just telecommunications. It's the onslaught of technology and global competition and the fact that .. look, this was a monopoly until about three or four years ago, and now it's been opened up to full and open competition - day one; and now we have the new regime in 1997 with any and all comers coming into the market. I think you would have to agree we just can't sit there with the same old level of efficiency and compete that way against new comers with greenfield operations. It won't work.

CATHERINE JOB: You're saying, though, that you need to shed staff and yet under your leadership the staff numbers at Telecom have .. Telstra have blown out by some 3,000.

FRANK BLOUNT: No, no, they haven't blown out. Look, we had 93,000 when I arrived here in early '92. We just closed a year with 93,000 full-time operative staff; that number steadily came down with no noise being made in the press, no union issues of any magnitude, and it went down to July '95 to 68,000 - a drop of 25,000 - no noise any place in the press. Nobody came to see me about it. You guys weren't around. And now we've gone up 6,000 since then, and it's almost all pay TV and two-thirds of those are fixed termed, which means we don't have long-term obligations to those people. They're under contract.

CATHERINE JOB: There's considerable disquiet about your contract over Foxtel. Have you put all your eggs in the wrong basket with the Foxtel contract?

FRANK BLOUNT: No, I haven't. No, I don't think I have. But by the way, let me just be honest about something: we won't know the answer to that question until after the market opens up for local calls and we see the impact of a company who's going to compete against us by offering a package of local calls, and possibly STD and IDD, along with pay TV on a discount basis. For me to sit here and doing nothing, my analysis - by the way, confirmed by Goldman Sachs UK cable experts - tells me we would lose about $7 billion a share on the value if we did nothing.

TONY EASTLEY: Telstra's Frank Blount.