Bernabe indicates job cuts loom at Telecom Italia

25 Mar 2008

In an interview published in the Financial Times yesterday, Telecom Italia (TI) CEO Franco Bernabe revealed that the company is embarking on a review of its working practices as it seeks to cut costs. Job losses are expected as Bernabe indicated that labour costs were ripe for streamlining. ‘We are going through a process of redefining the organisation,’ he said, before adding: ‘We want a lean organisation, and that means redefining the company’s entire micro processes’. Earlier this month the telco published a three-year plan highlighting the limited growth opportunities for the remainder of the decade, partly because Bernabe has ruled out major acquisitions in the near term due to the need to reduce the group’s debt position. The telco is targeting annual operating expenditure savings of EUR1.2 billion (USD1.9 billion), including EUR700 million to be generated through Telecom Italia’s alliance with Telefonica. In October 2007 the Spanish company, in partnership with banks Intesa Sanpaolo and Mediobanca, insurer Generali and the Sintonia holding company, bought an 18% stake in TI from Pirelli for EUR4.16 billion.

Italy, Telecom Italia (TIM)