Loss of 2,000 jobs at Eircom ‘likely to take five years’

INFORMED sources at Eircom say staff accept the need for significant redundancies at the company – but say the rumoured 2,000 job losses are likely to be spread over at least five years.

The company is in the midst of negotiations with unions representing their 7,000 staff about scaling back their operations.

According to sources, those talks are still far from completion, making reports of 2,000 job losses are “premature”.

However, it is understood that staff recognise there is a need for rationalisation for two significant reasons.

Firstly, a degree of inefficiency has developed since the amalgamation of Meteor and Eircom, with duplication in roles that had been carried out separately.

More significantly, the company is currently in the midst of a major trial of fibre optics in Wexford which, if successful, would mean that hundreds if not thousands of jobs would become obsolete.

In spite of that, one source said the workforce are happy that Eircom’s new owners STT are attempting to consolidate the future of the company as opposed to the approach taken by previous owners, Australian company Babcock and Brown.

The source said there was an acceptance that there was no future for Eircom without it being slimmed down.

However, the source also pointed out that management had just completed a workforce reduction of 1,200 positions in a process that had taken 18 months. He said the eradication of 2,000 positions would take five years.

One big obstacle to the management instituting redundancies is that there is a legacy agreement in place for up to 70% of the staff who have been with the company since before it was privatised. That agreement states that they cannot be made compulsorily redundant meaning redundancies from those people would have to be on a voluntary basis.

“We are in discussions with our union colleagues about the best way of streamlining and modernising our company for the future and of course it is going to result in fewer people but the absolute number has not been reached yet,” said Eircom chief executive, Paul Donovan.

Meanwhile, Enterprise Minister Batt O’Keeffe has claimed his department has not been notified about any large scale job losses planned for either Eircom or the country’s two biggest banks AIB and Bank of Ireland.

It would be normal that the Department of Enterprise would be informed in advance of any major redundancy drive.

It is rumoured that up to 1,000 jobs would be axed in each bank as they deal with the reduction in business caused by the recession.