Telecom Italia (NYSE: TI) and its labor union work force have worked out a truce to help Italy's incumbent service provider tighten up its ship by agreeing to lay off 3,900 workers. This latest agreement comes after Telecom Italia's initial proposal that it would cut 6,800 jobs.
As reported in Bloomberg, the job cuts will be done on a voluntary basis through 2012 as laid out in accord signed by Labor Minister Maurizio Sacconi and union and company officials. In addition, 2,200 other workers will get what Telecom Italia calls "solidarity contracts" that include a pay cut, a shorter work week and any other workforce reductions in the next three years.
"We're satisfied with the solution reached because negotiations were complex," said Antonio Migliardi, head of human resources for Telecom Italia.
Not surprisingly, what's driving Telecom Italia to conduct these job cuts is to reduce costs to more effectively compete with emerging rivals such as Fastweb and Vodafone. Telecom Italia's CEO Franco Bernabe has set a goal of slashing its debt by $6.6 billion over the next three years.
- Bloomberg has this article
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