Eircom to cut 2,000 workers as part of accelerated cost-savings plan

31 Oct 2012

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Eircom is to reduce its 5,700-strong workforce by 2,000 employees as part of an accelerated cost-savings plan. The workforce reduction will take place over the next 18 months.

The company said other changes include changes to existing work practices and consolidation of under-utilised office locations across Ireland.

In June, Eircom exited examinership with new capital and shareholders in place. Its three companies, Eircom Ltd, Meteor Mobile Communications Ltd and Irish Telecommunications Investments Ltd, had been placed under examinership in March.

The company created a simplified capital structure and a new holding company: Eircom Holdings (Ireland), which is owned entirely by the group’s lenders.

The examinership process removed €1.7bn worth of debt from Eircom’s balance sheet, about 40pc of group debt. At the time, Eircom said it would be now embarking on a five-year business plan that would include a €1bn home-fibre broadband plan.

In the coming months, the affected workers will engage in a number of face-to-face sessions across the country, led by Eircom’s recently appointed CEO Herb Hribar.

Last week, Eircom reported revenues have dropped 10pc or €174m to €1.5bn from the previous year.

“The challenges facing Eircom are significant,” Hribar said in a statement this evening.

“They require a fundamental transformation in the way we are organised, the business activities we prioritise and the work practices we have adopted in order to substantially reduce our costs and become more efficient.

“The programme is ambitious but the challenges are not insurmountable. The business strategy remains sound and our strategic investment continues. Achieving these cost reductions is vital to providing the organisation with greater flexibility. It will enable Eircom to deliver greater value, exciting new products, such as fibre broadband, and improved service to its customers across Ireland,” Hribar said.

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com