Telekom Austria said that it will offer a social plan to eligible employees, who can no longer be employed in the fixed net segment. Under this social plan, the telecom company expects approximately 400 employees to voluntarily leave the company in the coming years, 250 of which already by the end of 2009. The total estimated cost for this social plan of about E60 million will be provided for in the financial statements of 2008 as part of the non-cash provision for the redundant workforce in the amount of E630 million.
The measures are expected to improve 2009 EBITDA by approximately E35 million, primarily as a result of lower personnel expenses, with roughly E10 million resulting from cash savings due to the reduction of personnel expenses and personnel-related operating costs such as extra allowance, overtime, travel and trainings costs.
Boris Nemsic, CEO of the Telekom Austria Group, said: “Against the backdrop of a shrinking domestic fixed line market, downsizing measures are imperative and consequently, we have initiated a comprehensive cost-cutting program in the fourth quarter of 2007. While we have already achieved a number of milestones, a decision on the creation of a personnel agency for the redundant workforce has been postponed. Nevertheless, we will continue with our restructuring program until a decision has been made.”
