Telstra will slash a quarter of its workforce in a bid to reduce “layers of management” and save billions of dollars.

A whopping 8,000 jobs will go over the next three years as part of $2.5-million cost savings plan.

The cuts are aimed at reducing “two-four layers of management”, Telstra says.

The telco currently employs around 32,000 staff, meaning a quarter will go.

Telstra CEO Andy Penn tells Ross Greenwood the cuts are necessary to reduce costs and tackle increased competition.

“The reality is, if Telstra’s going to be competitive in the future, if we’re going to transform in a world which is rapidly being disrupted through technology we have to take a more radical approach.

“We have to be bold in terms of the changes we implement in the company and ultimately that does come with the consequence, it does impact jobs.

“I know that’s difficult but I would rather be open and upfront and transparent about that now.”

Mr Penn tells Ross the axing of jobs isn’t part of an offshoring strategy.

“This isn’t about offshoring or not offshoring, this is actually about removing work from the organisation.”

Click PLAY to hear the full interview below

.@Telstra will cut 8000 jobs and contractors as part of $2.5 billion cost saving + will create new business unit called InfraCo for possible future demerger @9NewsAUS @MoneyNewsShow pic.twitter.com/1Zp1QrsCai

— Ross Greenwood (@Ross_Greenwood) June 19, 2018