Australian telecom firm Telstra is currently reviewing its IT operations in what is said to be a campaign to cut its technology staff and outsource more of its IT duties, according to Australian media reports. Included in the review are negotiations with IBM over a five-year deal worth more than AUD 1bn ($740m).
An article in The Australian on Monday stated that Telstra has completed the first stage of its technology review, a four-month evaluation by IT consultancy Accenture. Now Telstra will centralize its IT operations, begin a round of 225 job cuts this month and another 200 by June 30, and start looking at new outsourcing possibilities.
The company as of now employs 1,500 full-time IT staff and 1,200 contractors, but it is believed that Telstra COO Greg Winn wants a staff of only 1600 full-timers.
As for its outsourcing engagements, the company reportedly pays IBM some AUD 250m ($185m) a year as part of a ten-year contract to run two of its four data centers, including hardware and software maintenance, and service management. Telstra manages the other two centers itself.
Telstra also has deals with EDS, Infosys Technologies, and Satyam Computers. According to The Australian, Accenture will now compete with Telstra’s current suppliers for IT work, and it has already won a sizeable deal to handle integration and management services for Telstra’s billing and customer systems.
A seperate report on Tuesday in Australian IT states that Winn seeks to cut down on the total number of Telstra’s IT suppliers, and that the current IBM talks could expand that relationship to include additional services.