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Telecom Italia seals deal with unions on more jobs cuts in Italy
Global Banking & Finance Review®
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MILAN (Reuters) -Telecom Italia (TIM) has clinched an agreement with national trade unions to cut 2,100 jobs through an early retirement scheme as part of a wider cost-cutting plan to 2024, a document seen by Reuters showed.
MILAN (Reuters) -Telecom Italia (TIM) has clinched an agreement with national trade unions to cut 2,100 jobs through an early retirement scheme as part of a wider cost-cutting plan to 2024, a document seen by Reuters showed.
Chief Executive Pietro Labriola is seeking about 1 billion euros in savings between now and 2024 while looking to revamp the debt-laden former phone monopoly through a break-up of its business, pressured due to price competition on its home turf.
The staff reduction deal comes on top of a previous agreement, sealed in June, entailing 1,200 jobs cuts by November. As of March 31, TIM employed about 42,500 workers in Italy.
The new early retirement plan is part of a wider deal to contain staff costs through a government funded scheme which will remain in place until February 2024, the document showed.
Such an agreement is expected to generate more than 200 million euros in savings for TIM, two sources familiar with the matter said.
Most of TIM’s domestic workforce will be affected by a reduction in working hours of between 10% and 25% and will be involved in retraining programmes.
Under the scheme, TIM will hire as many as 650 workers to boost some specific operations, such as cloud and cybersecurity.
In common with other incumbent telecom operators in Europe, debt-laden Telecom Italia is saddled with high staff costs.
Moody’s investors service calculates they accounted for around 27% of total 2021 operating spending, or 19% of revenue.
(Reporting by Elvira PollinaEditing by Keith Weir)
Early retirement is a program that allows employees to leave the workforce before the standard retirement age, often with financial incentives such as pension benefits or severance packages.
A cost-cutting plan is a strategy implemented by companies to reduce expenses and improve profitability, often involving measures like layoffs, budget reductions, or operational efficiencies.
A debt-laden company is one that has accumulated significant liabilities, making it financially vulnerable and often requiring restructuring or cost-cutting measures to manage its obligations.
A workforce reduction is a process where a company decreases its number of employees, often due to financial constraints, restructuring, or changes in business strategy.
Retraining is the process of teaching employees new skills or knowledge to adapt to changes in their job roles or to prepare them for new positions within the company.
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