Telstra is planning on shedding 651 jobs across Sydney, Melbourne and Queensland as customers shift from call centres to online services.
The telco says it will cut 422 full-time staff and 229 staff employed through agencies at customer service and call-centre operations across the three states.
The company on Tuesday said it planned to close its customer service centres at Lismore in northern NSW and Townsville in north Queensland.
It also plans to consolidate some service delivery testing functions in Melbourne and Sydney into other call centres operated by Telstra and its partners.
Telstra said under the proposed job cuts, 180 roles would be made redundant at its Melbourne and Sydney service contact centres.
Outsourced jobs in Sydney and Melbourne would shift offshore, a Telstra spokeswoman told AAP.
"Some of them will be going to the Philippines," she said.
Telstra blamed a 20 per cent fall in call volumes in the past 12 months for the job cuts.
Further falls were expected in coming years as fewer customers used phone services.
"In fact 30 per cent of our customers now use online transactions," the company said in a statement.
"As a result, we believe we need fewer contact centres in the future."
In Lismore, where 116 jobs will go, Mayor Jenny Dowell said the plans would devastate the regional community.
"It is a huge loss," she told AAP.
"I have had a phone call from a mother whose son works at the call centre, he moved here from Melbourne for it and his mother says he is just shattered."
Ms Dowell said she had been personally assured that positions in her towns were safe after Telstra closed a call centre in the NSW town of Grafton in 2011.
Another 126 roles in Townsville will also go.
Telstra said staff affected by the cuts would be invited to apply for other roles within the company.
A final decision on job cuts will be made in two to three weeks, a spokeswoman said.