Romtelecom spends 30m euros for 2,500 layoffs

Romtelecom, the largest fixed telephony operator on the local market, posted losses in the first quarter of 2008, after one-off expenses worth 30 million euros in restructuring costs, with 2,500 employees to be made redundant by the end of this year. This means that Romtelecom will pay 12,000 euros on average to every employee to be laid off, as part of the toughest cost cutting programme conducted by the operator in the last few years. The company currently has 12,357 employees. “We are focusing on improving internal processes and the effectiveness of the whole organisation, as well as on boosting the client base and on strengthening our position on the growing market segments,” said Yorgos Ioannidis, chief executive officer of Romtelecom. Restructuring costs significantly hurt Romtelecom’s financial figures, with the company witnessing operatinglosses worth 14 million euros in the first quarter of 2008, which prevented the Greek group OTE – the majority shareholder of the operator, from posting net profit increase, leaving the figure at 141 million euros, the same as a year ago.