SENIOR MANAGERS in Eircom have been asked to take a 10 per cent pay cut while staff at other grades will be asked to cut their salaries by 5-10 per cent as part of a cost-cutting exercise at the former State telecoms company.
Some 120 senior managers were briefed on the plan yesterday.
It is understood Eircom’s executive directors have agreed to have their pay cut by 10 per cent.
An Eircom spokesman could not confirm how soon the reduction in pay would be implemented.
It is understood the company, which last week reported a pre-tax loss of €791 million for the first half of its financial year, wants to implement the plan as quickly as possible.
Separately, Eircom this week wrote to unions requesting a meeting to discuss cost-cutting measures which are understood to include redundancies. The unions have agreed to a meeting, but no date has been set for talks.
Last week, Eircom booked a €720 million goodwill writedown on its results for the first half of the year due to its rising pension deficit and a deterioration in the outlook for profits.
Eircom’s defined-benefit pension scheme had a deficit of €433 million at the end of last year.
The company has previously stated its intention to reduce staff numbers by 900 by 2010.
Approximately 650 staff have already departed. Including its mobile subsidiary Meteor, Eircom employs about 7,000 staff directly.
Unions have expressed concern at the gravity of the financial situation at the company, which has debts of €3.7 billion following a series of leveraged buyouts by private-equity players.
Babcock Brown Capital (BCM), an Australian investment fund which controls 65 per cent of the telco, last week reported a loss of $1.4 billion (Australian dollars), the bulk of which related to the write-off of goodwill in Eircom.
The fund has said it is evaluating formal offers for the telco.
Eircom lost 41,000 retail telephone customers in the first half of the year.
An additional 46,000 broadband customers were signed up but this was a drop of 42 per cent on the same period in 2007.
