Wednesday, 20 September 2017

Magyar Telekom to cut 400 jobs

Magyar Telekom
Wednesday 16 September 09

Magyar Telekom has reached an agreement with trade unions on the wage development, headcount reduction and decrease in additional employee allowances at the parent company for 2010. The agreement also sets the range of surplus severance payments in the Collective Agreement, which in the period of 2011…

Magyar Telekom has reached an agreement with trade unions on the wage development, headcount reduction and decrease in additional employee allowances at the parent company for 2010. The agreement also sets the range of surplus severance payments in the Collective Agreement, which in the period of 2011-2014 envisages a gradual reduction to these payments to the third of the current level.


In line with the terms of the agreement, the Company has set a bonus budget equivalent to a 1.5% wage development for 2010. Headcount will be reduced by 400 employees, while further reductions will come from - among others - the employment termination of executives and employees retiring. Total severance expenses related to the headcount reduction will reach around HUF 7 billion. The majority of these expenses will be booked in the fourth quarter of 2009, with the rest accounted in 2010. The exact number and expenses of the headcount reduction will be announced at the end of the year once the detailed plan has been formulated.

As a result of today's agreement, our goal is to reduce our Total Workforce Management (TWM) related costs by HUF 6.5 billion compared to the 2008 level excluding severance expenses, which represents a reduction of more than 5% over the two year period. (In 2008 TWM costs without severance expenses reached HUF 121 billion at the parent company and the Hungarian subsidiaries.) The planned savings reflect the results of the TWM system introduced in 2009. Thanks to the more efficient resource management and headcount reduction, personnel costs are decreasing despite annual wage increases (5.6% in 2009 and 1.5% in 2010).

Magyar Telekom introduced the Total Workforce Management system from the beginning of 2009 in order to focus more on the total labour cost and not solely on headcount number and employee-related expenses. The system enables Magyar Telekom to increase the flexibility and efficiency with which all human resource-related expenses are managed, including contracted or rented employees as well as outsourcing and entrepreneurial contracts. As a consequence, the Company is able to switch between different forms of employment in order to increase cost efficiency.


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