Hutchison, VimpelCom Said to Seek 1,500 Job Cuts in Italyby
Companies preparing to start joint wireless-provider venture
Up to $530 million earmarked for voluntary redundancy packages
CK Hutchison Holdings Ltd. and VimpelCom Ltd. are planning to cut as many as 1,500 jobs, or about 16 percent of staff in Italy, as the two companies prepare to start their newly merged wireless provider in January, according to people familiar with the plan.
The combined entity led by Wind Chief Executive Officer Maximo Ibarra intends to use as much as 500 million euros ($530 million) to fund voluntary redundancy packages in the first half of 2017, said the people, who asked not to be identified because the matter is confidential. The packages may include payments of as many as four years of annual salary, they said, adding that the company also plans involuntary job cuts after this first round is completed.
Hutchison and VimpelCom won European Union approval in September for a merger of their 3 Italia and Wind units, creating Italy’s largest wireless provider. The merger in Italy will help billionaire Li Ka-shing’s Hutchison take on rivals Telecom Italia SpA and Vodafone Group Plc’s local unit. France’s Iliad agreed to acquire assets from the merging entities in July and is planning to enter the Italian market in 2017.
Shares of Hutchison added 1.4 percent to HK$94.90 in Hong Kong trading Friday. VimpelCom lost 0.9 percent to $3.29 in New York Thursday.
A representative for the combined wireless operators declined to comment.
Hutchison and VimpelCom agreed on the 50-50 joint venture last year to pool the assets of 3 Italia and Wind.
Bolstering his Italian business would also help Li diversify away from the U.K., his biggest profit generator, as Britain’s decision to split off from the European Union threatens to undermine the economy.