The managing director of Telstra's Sensis directories business, John Allan, told BusinessDay ''the vendors that we are considering provide services for customers that go beyond our service today, such as 24/7 operations and unique technologies that assist in processing efficiencies, which they do for many directory businesses around the world''.

Earlier on Thursday, Mr Allan reportedly told union officials that ''Australians will get better customer services from Manila or India. They have better technology and innovation.''

The Community and Public Sector Union spokesman Julian Lee said the comments were made during a meeting with union officials after Telstra announced the job cuts at the ailing Sensis unit.

The cuts, which include moving 391 customer service positions to the Philippines or India, come just two weeks after the telco booked a record half-year profit of $1.6 billion.

Telstra is slashing costs to arrest falling revenues at Sensis, which was once a cash cow for the company.

It hopes to turn the struggling print-based media business, which produces the Yellow Pages and White Pages directories, into one that is better suited for the digital market.

''Until now we have been operating with an outdated print-based model - this is no longer sustainable for us,'' Mr Allan said. ''Our future is online and mobile where the vast majority of search and directory business takes place.''

The Prime Minister, Julia Gillard, described Telstra's decision as ''really dreadful news particularly for the staff members''.

''It's always incredibly tough when someone loses a job,'' Ms Gillard told the Adelaide radio station 5AA.

The union condemned the company's actions. ''Telstra has done well out of Australia, its profits have risen off the back of hard-working staff and loyal customers and this is how it repays them - by sending almost 400 jobs offshore,'' the union's national secretary, Nadine Flood, said.

''And to add insult to injury, we have been told that one of the reasons why they are doing so is because Australian consumers can get better customer service in the Philippines or India.''

The Sensis business has been under pressure in recent years as customers desert print for digital advertising. At Telstra's most recent half-yearly results, the unit reported a 12.6 per cent fall in revenue.

Telstra remains obliged to produce the White Pages as part of its licence conditions.

At a media briefing two weeks ago, the Telstra chief executive David Thodey said Sensis would continue to be restructured as it moves ''from a print to a digital business''.

Sensis appointed digital media executive Jeremy Birt as its new executive general manager on January 30, with a brief to oversee the company's print and digital operations.

The company also acquired True Local in January and indicated the online directory would be added to its Yellow Pages network. The deal was subject to ratification by the Australian Competition and Consumer Commission.