Savage cuts see 2,000 Eircom jobs go
The telecommunications company is expecting to complete the lay-offs, which will be across all sectors, by the middle of 2014.
According to an email sent to staff yesterday, more than 30% of the company’s workforce will lose their jobs by the end of the year.
No compulsory job cuts are being sought yet, but those aged over 60 will be asked to retire immediately.
The Communications Workers Union insisted last night redundancies would have to be voluntary and subject to negotiation.
Eircom already encouraged 1,500 to take redundancy or early retirement in the past three years.
It says it has initiated a “full communications programme” with staff to provide greater detail in a number of face-to-face sessions over the coming weeks. “This will be led by the CEO and the senior management team,” said a company spokesperson.
The scale of lay-offs is twice that expected earlier this year. During the examinership process, a rescue package was unveiled involving 1,000 job losses as part of a five-year restructuring plan.
Three businesses — Eircom Ltd, Meteor Mobile Communications Ltd, and Irish Telecommunications Investments Ltd — were affected by the examinership.
Under the business plan proposals before the court, Eircom’s gross debts were to be reduced from about €4bn to about €2.35bn.
The company was valued at about €8.4bn around the time of its flotation in 1999.
In a statement, Eircom said it informed staff yesterday it was reducing the workforce from 5,700 to 3,700 to accelerate a range of cost-cutting measures.
“Other changes include further modernisation of our work practices and consolidation of under-utilised office locations across the country,” read the statement. “Union representatives have been informed... and it is the company’s intention that detailed discussions will commence shortly.”
Eircom chief executive Herb Hribar said: “The challenges facing Eircom are significant. They require a fundamental transformation in the way we are organised, the business activities we prioritise and the work practices we have adopted in order to substantially reduce our costs and become more efficient. The programme is ambitious but the challenges are not insurmountable.
“Achieving these cost reductions is vital to providing the organisation with greater flexibility.”
Eircom’s revenues and earnings fell in the past year as it continued to lose ground in the fixed-line and broadband markets. Its revenues fell by 10% to €1.5bn in the year to the end of June. That month, Eircom exited examinership after agreeing a reduction in its borrowings with lenders. It also secured new capital and shareholders.
It created a simplified capital structure and a new holding company, Eircom Holdings (Ireland), owned entirely by the group’s lenders.
