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Magyar Telekom to cut 250 jobs

Telco

Magyar Telekom on Tuesday said it reached an agreement with trade unions on plans to reduce headcount by 250 in 2012.

The figure does not include termination of executives and retiring employees, Magyar Telekom said. Most of the 250 are expected to leave the company by the end of 2011, it added.

To improve efficiency, Magyar Telekom said its organization would be simplified and the number of directors cut by 24%.

Severance pay related to the job cuts will reach about HUF 2.6bn. Most will be accounted in Q4 2011.

Management also agreed with unions that there would be no general increase in base salary for employees in 2012. However, benefits in kind will be increased for low-earning employees who would otherwise take home less because of personal income tax changes. The increase is compensation expected by the government.

Additional employee benefits will be cut for managerial positions.

Magyar Telekom aims to reduce Total Workforce Management (TWM) related costs, excluding severance and capitalized employee expenses, by HUF 3.4bn in 2012 compared to 2010.

Together with the HUF 13.9bn of savings achieved since the end of 2008, this will represent a reduction of more than 13.8% over the four-year period, the company said.

Magyar Telekom said its management plans further measures to boost efficiency as part of next year's planning process, depending on the external environment.

 

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