Network Ten in voluntary administration, Telstra to axe 1,400 jobs

By on
A worker cleans up a Telstra public phone in central Sydney, February 11, 2010. Reuters/Daniel Munoz

Network Ten is forced to enter voluntary administration following its shareholders announcement that they would no longer pledge a key loan. Meanwhile, Telstra is cutting up to 1,400 jobs across Australia as part of a cost-cutting drive.

In a statement to the ASX on Wednesday morning, Network Ten declared that KordaMentha was appointed as voluntary administrators of the company and its subsidiaries. Trading in the television broadcaster shares has been suspended.

The statement further stated directors were left with no other option but to appoint administrators as the company loses support of billionaire backers Lachlan Murdoch and Bruce Gordon, regional TV network owner. The administrators are expected to work closely with the network's management, content partners, employees and suppliers while a financial and operational assessment of the company is ongoing.

"The directors of Ten regret very much that these circumstances have come to pass," the statement reads. Operations will go on "as much as possible on a business as usual basis.”

Amid the news, Communications Minister Mitch Fifield urges Labor and cross benchers to support proposed media law reforms. According to him, Network Ten's announcement that it will enter voluntary administration must be a “wake-up call” to those who are against media reform.

Looming job cuts

Telstra employees from all divisions, which include line technicians, maintenance and installation workers, are reportedly at a risk of losing their jobs. Union officials pointed out that employees were left in the dark as they have only learned of the job cuts via media reports.

Assistant division secretary of the Communication Workers Union John O'Donnell said it was “disrespectful” to their members, their families and the union."We need accurate details from Telstra,” the Sydney Morning Herald quotes O'Donnell as saying. He said they are waiting for a document from the company to provide further information.

Telstra chief executive Andrew Penn is expected to personally announce the changes. On Wednesday, employees were briefed on the job slashes.

Telstra has over 32,000 full-time employees across the country. The company is likely to wipe out 5 percent of its workforce.

On Wednesday, Telstra shares rose 0.2 percent higher at $4.39. It revealed its plans last year to cut fixed costs by over $1 billion over the next five years.

Even Time Inc is looking to cut cost and is slashing 300 positions, according to an internal memo from Chief Executive Officer Rich Battista, which was reviewed by Reuters. The New York-based media company reportedly plans to reinvest in growth areas.

Read More:

Australia's top dole bludging suburbs revealed

Double-decker buses are back as NSW phases out bendies