MILAN (Reuters) -Telecom Italia (TIM) has clinched an agreement with national trade unions to cut 2,100 jobs through an early retirement scheme as part of a wider cost-cutting plan to 2024, a document seen by Reuters showed.
Chief Executive Pietro Labriola is seeking about 1 billion euros in savings between now and 2024 while looking to revamp the debt-laden former phone monopoly through a break-up of its business, pressured due to price competition on its home turf.
The staff reduction deal comes on top of a previous agreement, sealed in June, entailing 1,200 jobs cuts by November. As of March 31, TIM employed about 42,500 workers in Italy.
The new early retirement plan is part of a wider deal to contain staff costs through a government funded scheme which will remain in place until February 2024, the document showed.
Such an agreement is expected to generate more than 200 million euros in savings for TIM, two sources familiar with the matter said.
Most of TIM's domestic workforce will be affected by a reduction in working hours of between 10% and 25% and will be involved in retraining programmes.
Under the scheme, TIM will hire as many as 650 workers to boost some specific operations, such as cloud and cybersecurity.
In common with other incumbent telecom operators in Europe, debt-laden Telecom Italia (BIT:TLIT) is saddled with high staff costs.
Moody's investors service calculates they accounted for around 27% of total 2021 operating spending, or 19% of revenue.