Group may not pay bonuses to sales staff

EIRCOM IS considering not paying bonus commissions to sales staff for business generated in the first three months of 2009.

It is also believed to be considering cancelling bonuses due to some sales staff from 2008.

This move has angered staff but Eircom’s management are thought to consider it necessary as it seeks to control its cash flow in the context of declining revenues and the need to service debts of €3.8 billion.

Eircom said: “In March, Eircom took a significant decision to invite staff to accept a voluntary pay reduction ranging from 5 per cent to 10 per cent.

“In addition, the company decided that no annual performance-related bonuses would be paid this year or for the coming two years.

“The company does not expect that these decisions will be welcomed by all staff, but they are necessary in the current economic climate. The company is still working through several associated implementation issues with no final decisions taken at this time.”

One source within the company said some managers are seeking to retract their agreement to take pay cuts of 10 per cent each.

In addition to the bonus cuts, 28 account managers in one section of the business have been told to reapply for just 24 positions in the unit.

The four employees in the Enterprise Account Management section of Eircom who do not make the cut will be reassigned to the group’s “Resource Business Unit”, which is regarded within the telecoms company as a holding area for staff who are no longer wanted by the telecoms operator.

Eircom said: “We regularly review and restructure parts of our business and the Enterprise Account Management area is an area of current focus, in the context of changing customer requirements and changing technology.”

It is understood that sales staff in a number of sections within Eircom had been reassured recently by their managers that bonus commissions relating to their activities would not be impacted. The company now seems to have changed its position. These payments can run into thousands, after tax, each month.

Eircom is believed to be preparing to cut 1,200 workers from its payroll.