Hellenic Telecommunications Organisation (OTE) on Monday announced a package of measures aimed at drastically cutting operating costs and ensuring its viability, two days after reporting losses in the fourth quarter of 2010.
The measures, to be implemented in two tranches - the first starting March 1 and the second on May 1- envisage raising work hours for staff, cutting over-time work, abolishing privileges and facilities and cutting 120 employees from mobile unit Cosmote’s workforce.
The measures aim to cut OTE’s operating costs by 32 million euros annually, and are characterised as necessary because of the economic crisis and in order to strengthen the company as it faces intense competition and regulatory challenges.
In an internal document sent to OTE’s employees, Mihalis Tsamaz, chairman and chief executive of the group, painted a bleak picture of the situation due to the crisis, intense competition and stiffer regulation, resulting in a loss of more than 30,000 voice customers per month, a 10 pct decline in revenues and a 78.5-pct drop in profits last year.
Tsamaz said there is an urgent need to cut labour costs, currently at 35.3 pct of revenues, to 766 million euros in 2010. He underlined the need for investments in new generation networks, new technologies and products. The announcement led to a strong reaction by the OTE union.