- Tim plans to eliminate about 8 percent of its workforce
- The company will create a business unit for its 180 shops
Telecom Italia SpA’s Brazilian unit plans to eliminate about 8 percent of its workforce in a first step to lower costs and improve efficiency at the country’s second-largest wireless provider, according to two people familiar with the matter.
The staff reduction at Tim Participacoes SA would involve about 1,000 full-time white-collar positions, the people said, asking not to be identified because the information isn’t public. The cuts are planned by the end of March, one of the people said. Telecom Italia intends to announce details of the cost reductions to unions as early as Feb. 16. The project also includes the creation of a business unit for Tim’s 180 retail shops, which employ about 2,000, the person added.
The Brazilian unit’s reorganization will be discussed by the board of Telecom Italia on Feb. 15, when the company also reviews its 2015 financial figures and new business plan, the people said. Tim also is considering a partial outsourcing of its call centers, which employs 5,000 workers, the people said. A spokesman for Telecom Italia declined to comment.
Tim has been working on a plan to cut 1 billion reais in annual costs by the second half of 2017, including a broad review of its processes and activities, the Brazilian company said in a statement. “It is being carried out with great discipline with the goal of create an improving outlook for operations and for the investment capacity of the company,” Tim said. The company hasn’t disclosed a figure for job cuts, it said.
Tim plans to present a plan for its strategy through 2018 on Feb. 16 in London, the company said.
Rio de Janeiro-based Tim has about 13,000 workers in Brazil, including the call-center staff. The company, which last year posted sales of 17.1 billion reais ($4.4 billion), has attracted merger interest from smaller rival Oi SA. In October, LetterOne, Mikhail Fridman’s investment company, agreed to begin talks with Oi to inject as much as $4 billion in the carrier to help produce a combination with Tim.
The company resulting from a merger of Tim and Oi would have a market share of about 44 percent in Brazil, according to data from the regulator Anatel. Competitors include Telefonica SA’s local unit and Carlos Slim’s America Movil SAB.