Press Releases

Budapest, October 1, 2007 17:45

Magyar Telekom has reached an agreement with trade unions on the headcount reduction for 2008.

In order to simplify and streamline its organization, Magyar Telekom has already implemented several integration steps. The merger with T-Mobile Hungary in March 2006 and the integration of Emitel and the access business of T-Online into the parent company from October this year enable the management to eliminate overlaps and simplify the processes and the operational structure of the Group. The recent decision on the change in the organizational model was a further step to ensure a more customer-focused approach and a lean management structure. With the aim for further efficiency improvement and headcount reduction, management started negotiations with the trade unions and reached agreement today.

The consequent decision regarding Group-level headcount reduction is expected to result in a further HUF 24 bn severance-related expenses this year, to be accounted in the fourth quarter. (Headcount reduction-related severance payments and accruals were HUF 7.3 bn in H1 2007.) The already implemented headcount reductions and today’s headcount reduction-related agreements are expected to result in an annual saving of HUF13 bn in Group-level employee related expenses. The trade union agreement also defines the wage increase for the remaining employees at the parent company for next year, which will be 5.5% from March 2008. As a combined result, underlying Group-level employee related expenses are expected to decrease by 5% next year. The majority of the headcount reduction will be implemented on the last working day of 2007 reducing the closing headcount of the Group in the first quarter of 2008. The headcount reduction measures are expected to decrease the Group-level headcount by 15% by the end of 2008 compared to the end of June 2007 level.