Telstra-owned integrator, Kaz Group, will axe 200 staff following a company review.
A Telstra spokesperson said the review revealed duplication across the business, opportunities to make business processes more efficient, and a new strategic direction for the company.
"We are constantly reviewing the business to ensure it is operating effectively and efficiently and in the best interests of our customers and shareholders," the spokesperson said. "This applies to all parts of Telstra, including Kaz."
Not all staff being cut have been made aware of their fate. Most of the job losses will come from its NSW and Victorian offices.
The staff cuts are part of a Telstra-wide transformation announced in November 2005, centred on an investment in simpler IT systems, new technology for customers and a reduction of duplication within the business.
"Like all services industries, this is a dynamic and fast-moving industry and KAZ needs to continually adjust its work force to best meet customer needs," the spokesperson said.
Telstra acquired Kaz, one of the largest ICT services providers in Australia, in 2004 for $333 million.