Ireland: Eircom, the fixed incumbent, is to reduce its workforce by 1,200 over two years to save costs

[Irish Independent] A total of 1,200 workers are set to lose their jobs at Eircom over the next two years in a bid to reduce costs by €130m a year.

Unions have accepted a deal -- first reported in the Irish Independent -- that includes job cuts and a two-year pay freeze, but only on condition that the redundancies are not compulsory.

It is understood the job losses will mainly affect customer service and sales employees and will have a limited effect on technical staff.

The company, which employs 7,500 workers, is also seeking voluntary pay cuts, ranging from 10pc for managers to five per cent for those in operative positions.

Last night, Eircom said it had reached a restructuring deal with unions that included a "headcount reduction" by 2011.

It said the proposal is the first stage of its cost-cutting plan and includes cuts of up to 25pc in allowances, including subsistence and mileage rates.

Staff will not get performance related annual bonus payments over the next two years, a situation that will not be reviewed until June 2010.

General secretary of the Communications Workers Union, Steve Fitzpatrick, said the union and staff were "not happy at all" with the agreement.

"We've been forced into agreeing to cost savings to protect as many jobs as possible because of the financial situation the company finds itself in," he said. "How many workers will take a voluntary redundancy package given the state the jobs market is in?"

Eircom said the economic environment had "dramatically deteriorated" and had a significant "adverse impact" on Eircom, which has a debt burden around €4bn.

Urgency

It said the "scale and urgency" of its efforts to stay competitive were extremely challenging and the cost of its defined benefit pension scheme would have to be reviewed.

"Today's announcement is an important first step," said acting group CEO Cathal Magee yesterday. "Management recognises the very significant impact of the current economic environment and is committed to securing far-reaching cost reductions, and an overall vision and strategy framework for the business.

"The company and the union representatives have demonstrated the willingness to make difficult but necessary decisions to ensure the long-term competitiveness of Eircom."


Union fury as Eircom outlines 1,200 job cuts plan