Salmat shares slid six percent following Telstra's decision not to renew contracts for 742 staff at outsourced call centres across the eastern states.
Shares recovered slightly to be down 5.5 percent to $3.90 in late trade.
In a statement to the stock exchange, Salmat said it was "notified by Telstra that Telstra no longer requires the provision of certain call centre services from Salmat".
"The notification covers the bulk of of the call centre services Salmat currently provides to Telstra," the statement read.
Trying to put a brave face on the loss of business that will cost it $4 million to $5 million a year or about 5 percent of its annual revenue, Salmat said it was in line with the provider's "strategy ... to move away from labour hire call centre contracts".
Salmat has until May to find jobs for the 742 outsourced call centre staff affected in:
- Surry Hills, NSW, 330 jobs
- Geelong, Victoria, 163
- Wagga Wagga, NSW,142
- Bundaberg, Queensland, 107