Telecom Italia Is Considering 7,000 Job Cuts Over 3 YearsBy
Company earmarks about $800 million for buyouts, retirements
Carrier aims to simplify its organizational structure
Telecom Italia SpA is considering cutting about 7,000 jobs in Italy, or 14 percent of its local workforce, to make the former phone monopoly more profitable and efficient, according to people familiar with the matter.
The company led by Chief Executive Officer Amos Genish has started informal discussions with unions to review ways to reduce labor costs while remaining in compliance with Italian law, said the people, who asked not to be identified because the talks aren’t public. Telecom Italia would be in favor of reducing the headcount through about 4,000 early retirements and about 3,000 voluntary buyouts over three years, the people said.
Telecom Italia aims to hire about 2,000 young employees, funded by reducing the working hours of about 3,000 other people, the people said. All the measures are still under discussion and no final decision has been made. The company will meet with unions on Jan. 18, people said.
Telecom Italia, whose biggest shareholder is French media conglomerate Vivendi SA, is planning to set aside about 700 million euros ($834 million) to pay for the early retirements and voluntary buyouts, one of the people said.
A Rome-based spokesman for Telecom Italia declined to comment.
Like other big European phone companies, Telecom Italia needs to increase investments to speed up its network even as revenue shrinks because of competition. The Italian phone carrier’s annual sales fell in 2016 to 19 billion euros, down 10 billion euros from 2011, while earnings before interest, tax, depreciation and amortization fell 33 percent in the same span. Employees in Italy dropped to 51,122 from 56,838 in that period.
The new Telecom Italia 2018-2020 business plan, which will be unveiled March 6, will include measures for reducing overlapping positions, according to a document obtained by Bloomberg News. Telecom Italia is also committed to “accelerating generational turnover” and aims to firm up its labor plans by early February, according to the document.
— With assistance by Sonia Sirletti