Eircom in talks with unions over job cuts

EIRCOM HAS entered talks with its trade unions on a new three-year business plan that will lead to more redundancies at the telecoms group and possibly changes to certain work practices.

But chief executive Paul Donovan yesterday told The Irish Timesthat "no pre-cooked number" has been decided upon in terms of job cuts. This follows a report in a Sunday newspaper that Eircom wants to cut another 2,000 jobs from its near 6,500-strong workforce.

“It’s difficult to come out with a number,” Mr Donovan said. “That needs to be subject to detailed evaluation and agreement with our unions.”

It is understood that Eircom’s senior management made a presentation to unions last week, outlining details of a new three-year business plan for the company.

Mr Donovan said no specific number of redundancies was outlined in that presentation but that unions were informed of the cost savings that Eircom is seeking to achieve over that timeframe.

Eircom has shaved about €130 million from its cost base over the past two years through redundancies and other savings.

Mr Donovan said yesterday Eircom continues to employ more staff per telephone line than its peers in Europe. Workers were also better paid compared to their counterparts overseas.

This affected its competitive position, he added. The national executive of the Communications Workers Union will meet this morning to discuss the new business plan. The union represents more than 5,000 workers at the business. No comment was available from the union yesterday.

Mr Donovan said he hopes to conclude negotiations with Eircom’s unions by October. He reiterated a previously stated position that the terms of future redundancy packages would not be as generous as past ones, but added that there were no plans to seek compulsory redundancies.

“There are absolutely no plans for anything other than voluntary leaving, which we’ve had in the past,” he said.

A reduction in headcount will likely comprise a number of initiatives.

Eircom is integrating its mobile arm, Meteor, with the fixed-line business, which will lead to a reduction in back-office functions and savings in IT.

The company is also mulling a €1 billion-plus upgrade of its network from copper to fibre, which would require fewer workers for maintenance purposes.

“Fibre and wireless will generally need far fewer staff,” Mr Donovan said.

Eircom is concluding a voluntary redundancy plan that will see 1,200 workers leave the business. This is expected to be completed by September, some six months ahead of target.

The company is under significant pressures. In the nine months to the end of March, its revenues declined by 9 per cent to €1.38 billion while its earnings before interest, tax, depreciation and amortisation fell by 3 per cent to €497 million.

Eircom will publish its full-year results in the final week of August.