Feb. 28 (Bloomberg) -- Hellenic Telecommunications Organization SA, Greece’s biggest phone company, will cut overtime and allowances for managers to save 32 million euros ($44.3 million) as profit and sales fall.
The Athens-based former monopoly, in which Deutsche Telekom AG has a 30 percent stake, will introduce a 40-hour working week as of May 1, in line with that valid for the private sector, and will cut monthly allowances for managers by 15 percent as of tomorrow, according to an e-mailed statement from the company, known as OTE.
“OTE is a at critical juncture,” Chief Executive Officer Michael Tsamaz said in the statement. “We need to reduce operating costs at OTE, which far exceed those of our competitors in Greece and other telecommunications companies in Europe.”
Hellenic Telecom, which is 20 percent owned by the Greek state, reported on Feb. 25 that its fourth-quarter loss more than tripled to 91.7 million euros on a higher charge for an early retirement program. Sales fell 12 percent in the period and the company said at the time it planned to announce incentives to immediately shore up revenue.
Shares in the company gained as much as 5 percent after the news, and traded 3.6 percent higher at 7.47 euros at 4:45 p.m. in Athens.
The company will also cut non-essential overtime as of tomorrow, and a monthly allowance for driving company cars as well as bus service for employees for the OTE headquarters. Savings will amount to about 32 million euros, the company said.
Personnel costs account for 46 percent of OTE’s costs, according to today’s statement, or about 35 percent of revenue. The company has been prevented from scaling back on payroll costs in part due to laws that protect employees from being fired, dating back to when the company was fully owned by the Greek state.
Earlier, the federation of trade unions at the company said 120 jobs at Cosmote, Hellenic’s mobile-phone unit, would be cut, and called on OTE employees “to be ready to react.”
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