Babcock warn Eircom staff over redundancy targets

Eircom owner Babcock & Brown has told its 7,100 staff that the terms of its voluntary redundancies programmes will be set at "a significantly lesser level" after next March.

The company told The Irish Times it is unlikely to meet its target of 400 voluntary redundancies by the end of 2007 though it expects more than that number to have departed by next spring.

Eircom plans to reopen the redundancy package to staff in a number of areas of the company over the coming months. In a note to staff last Friday, Eircom's group human resources director, Tony Olthof, said details of the new standard voluntary leaver (VL) terms would be issued soon.

"The company also intends to introduce further reductions to standard VL terms at a later date in 2008," Mr Olthof added. The "downward changes" to voluntary leaver terms for Eircom staff would reflect age and service profile. "Increasing numbers may be expected to retire in the normal manner thereby reducing the need for VL programmes."

Under the current programme, the average payout to staff is between €140,000 and €150,000. This will cost the Australian investment group between €126 million and €135 million.

In May, Eircom chief executive Rex Comb said he wanted to reduce its headcount by 900 by June 2010, with 400 originally planned for this year.

By the end of October, however, just 220 staff had been approved for the voluntary leaver package out of 520 applications.

It is understood the programme will reopen later this week for staff in Eircom's central services unit, which comprises a number of administrative functions.

"Additional targeted VL programmes will be announced in the near future by both the retail, and wholesale and network's business areas," Mr Olthof's added.

Since going private in 1999, Eircom's voluntary leaver packages have been among the most generous available to workers in Ireland. An Eircom spokesman said the packages offered after next March would continue to be attractive. "The terms offered will still be above industry norms and will be well above statutory entitlements."

Commenting on Eircom's move, Communications Workers Union general secretary Steve Fitzpatrick said: "This looks like an attempt to get people who are contemplating taking redundancy to make the jump."