Magyar Telekom (Reuters: NYSE: MTA.N,
BÉT: MTEL.BU and Bloomberg: NYSE: MTA
US, BÉT: MTELEKOM HB), the leading Hungarian telecommunications service
provider, announces that it 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.
Investor Releases
2009. 09. 22. 07:43:54
Budapest, September 16, 2009
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 7bn. 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
6.5bn 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
121bn 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).
About
the TWM system
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.
Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors are described in, among other things, our Annual Report on Form 20-F for the year ended December 31, 2008 filed with the U.S. Securities and Exchange Commission.
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