The Hellenic Telecommunications Organization SA (OTE SA), announces that it has decided to adopt a set of specific measures, effective immediately, aiming to reduce the operating costs of the Company and to ensure its viability.
These measures, made necessary by tough market conditions as well as the financial results for the year 2010, will enable OTE to:
- face stiffer competition and regulatory challenges,
- slow down the pace of revenue decline,
- invest in the overall customer experience,
- invest in new-generation networks and new technologies.
Already, concrete projects have been launched to reduce costs in all operations. Specifically regarding personnel costs, the measures, which will be applied with immediate effect and concern either all Company employees or specific employee categories, include:
- Introduction of a 40-hour workweek, similar to that existing in the private sector, as of May 1, 2011.
- 15% reduction of the monthly allowance paid to all persons holding a managerial position, other than that provided by collective labor agreements, as of March 1, 2011.
- Elimination of all non-essential overtime work, as of March 1, 2011, by:
o introduction of rotating shifts in areas where necessary and where this is required to improve the efficiency of customer service (e.g. shops, call centers),
o application of standard labor law to the payment of work on Sundays and holidays (i.e. +75% premium and a day-off for an 8-hour working day instead of +175% premium and a 5-hour working day currently applied),
o implementation of Company vehicle maintenance within normal working hours and not as overtime.
- Elimination of the monthly allowance for driving Company cars as of March 1, 2011.
- Elimination of the buses used to transfer employees from/to the OTE Headquarters Building at Maroussi, as of May 1, 2011, with a simultaneous adjustment of the monthly transport allowance. Buses transporting personnel to Parnitha, where the OTE Logistics Center is located, as well as the shuttle bus service between the OTE Headquarters Building and Neratziotissa Metro station, will be maintained.
- Reduction of the yearly bonus awarded for bad debt recovery.
- Reduction of a yearly ?balance-sheet? allowance for those employed in the accounting sector.
Savings from the above cost-cutting measures are estimated to be around 32 million euros.
Announcing the measures to employees, OTE Chairman and CEO, Mr. Michael Tsamaz, noted: "OTE is at a critical juncture. Within the context of applicable labor law, we have decided to make changes and take measures necessary for the continued viability of the Company. We need to reduce operating costs at OTE, which far exceed those of our competitors in Greece and other telecommunications companies in Europe, and have been continuously moving upward. Labor costs are the most important element of the cost structure of OTE. It amounts to 46% of this or 35.3% of revenues. In 2010 it stood at 766 million, exceeding by 265 millions the revenues from the monthly rental fees! We need to speed up the transformation of OTE into a strong competitive company. In 2011, we will intensify our efforts to slow down the pace of revenue and profitability decline. At the same time, our main aims remain to improve the overall customer experience and create long-term value for our shareholders".