Unions irate as KPN cuts 750 jobs

8 October 2004

AMSTERDAM — Dutch telecoms firm KPN announced on Friday it would cut 750 jobs from its landline division. It blamed reduced revenues due to the sluggish economy, price erosion and growing competition.

The job losses will take place at KPN’s EnterCom Solutions subsidiary, which is part of the fixed line division. It is active in the corporate market, installing and maintaining company telephone switchboards.

The latest job cuts come on top of the 800 job losses announced in January, a KPN press release said. The company aims to improve its efficiency.

It said 140 jobs losses will be effective immediately and the remaining cuts will be carried out next year. “Forced redundancy will be avoided wherever possible but cannot be ruled out,” KPN said.

KPN is to consult with the labour unions and works councils about the job losses. Employees who lose their job will come under the social plan agreed with unions in the CAO workplace agreement for 2005. KPN has allocated about EUR 25 million to fund the job cuts.

But union AbvaKabo is outraged by the job losses and said in view of the government’s social security cutbacks, the laid off workers face an “enormous” financial impact.

Union CNV Publieke Zaak said it was “shocked” by the extent of the job losses, which amount to 30 percent of the EnterCom workforce. It also pointed out that the latest round of losses were the third since 2001.

Analysts from business bank Petercam have estimated that KPN is set to save EUR 30 million per year due to the EnterCom reorganisation, newspaper De Telegraaf reported. The company has refused to comment.

As market leader, KPN faces declining revenues from its fixed division as a result of competition and consumers switching to mobile phones, where KPN is also under pressure due to increased competition.

Subject: Dutch news