Eircom and its mobile operator unit Meteor are undergoing a series of cost cutting measures, which will include job cuts, following a nine per cent decline in the company’s revenue in the first quarter of its financial year.
Chief executive Paul Donovan said in an internal memo to staff that he plans to “instigate a far-reaching set of measures to reduce operating costs and capital expenditures in the short-term.”
He confirmed that there would be “headcount reductions” in the coming months as “we accelerate our efforts to reduce the workforce by 1,200.”
About 700 employees have already left the business since the first announcement to staff in April this year informing them of the changes.
Eircom is poised for a partial acquisition by South East Asian company Singapore Technologies Telemedia (STT). STT are set to takeover close to 50 per cent of Sydney based Eircom Holdings (ERC).
Eircom staff voted in overwhelming support of the takeover with the results of an internal ballot confirming that 97 per cent of a total of 8,672 votes were in favour of the deal, expected to close by January 4.
Eircom reported a nine per cent decline in its revenue in Q1 of its financial year and profits fell by one per cent. Operating costs declined by 13 per cent. Meteor actually increased its customer base by 38,000 year-on-year to 1.046 million but its average revenue per user slipped eight per cent to €36.02.
As a result of the falling profits, which Eircom has attributed to a “challenging” market, various changes will be implemented across the company.
Technology organisations across the group are to be combined into a single unit, which will be managed by current Meteor chief executive Brendan Lynch who will become managing director of group technology.
Management structures will be under review and overtime for all staff will be cut back.
Eircom also plans to stop staff from carrying forward annual leave entitlement and they will no longer have time in lieu.
“All marketing and sponsorship spends will be reviewed for value for money. Also further price cuts will be sought from suppliers and all managers will have their budgets cut. These budgets will be reduced and the changes are non-negotiable,” said Donovan.