In less than one year, the biggest fixed telephony operator on the market will lay off 20% of its employees as part of a process that will leave Romtelecom with 10,000 staff from 45,000 in the early 2000s.
The first steps have already been taken. Employees received a message from CEO Yorgos Ioannidis, explaining the reasons for restructuring. The top management team visited nine cities and met 4,000 Romtelecom employees across the country. Around 60% of the company’s employees have already undergone an evaluation process, in the wake of which the company will decide which employees to retain.
“We’ve tried to assess employees on an equal basis because we want to keep the best staff (…),” explains Anca Georgescu, Romtelecom’s HR manager in charge of personnel changes at the company. This is the toughest restructuring Romtelecom has conducted in recent years and one of the largest on the market this year.
Romtelecom’s number of employees has dropped constantly in recent years, while the operator has almost 12,500 employees at present, compared with almost 45,000 in 1999. “All employees are going to be affected one way or another as current activities are changing for everybody, but greater efficiency is of optimum importance, in order to remain competitive on a telecom market with tight competition,” specifies Georgescu. In terms of restructuring costs, she says they are difficult to assess because it is hard to calculate what has to be included in the cost base.
Last year, Romtelecom spent 221.6m euros on salaries. Thus, a 20% cut in personnel may bring a reduction in expenses by over 40m euros for the human resources component of the restructuring alone.
The impact of restructuring will be visible in terms of layoffs, but the process the operator will undergo is much more complex. Many of the current activities will change, as all departments will be affected by restructuring.
The decision to start the restructuring process was made early this year, on 28 January, but the 2008 business plan had been thought out over many months before.
In the case of Romtelecom, the very scope of the project is complex, as restructuring will entail over 60 projects that aim for greater efficiency throughout the company.
In terms of the human dimension of restructuring, between 2,000 and 2,500 employees will be forced to leave the company by yearend. Besides the evaluation of personnel, restructuring also entails an evaluation of the processes on the basis of which Romtelecom operates. For the redundant employees, Romtelecom has signed a partnership with BPI consultancy to find new jobs. Moreover, Romtelecom will pay “substantial” compensation.
Even after this year’s restructuring, Romtelecom’s personnel will be double the level of RCS&RDS, and around three times bigger than Orange’s, and also Vodafone’s.
RT restructuring
Will lay off 20% of employees, a process that will leave it with 10,000 staff from 45,000 in the early 2000s
The impact of restructuring will be visible in terms of layoffs, but the process the operator will undergo is much more complex
This will be the toughest restructuring Romtelecom has conducted in recent years, and one of the biggest on the market this year
Over 60 projects will aim to increase efficiency