Eir has unveiled plans to cut 750 jobs days after a majority stake in the company was acquired by two French firms controlled by telecoms billionaire Xavier Niel, in a move that may cost the company more than €100 million.
Departing staff are being offered five weeks’ pay per year of services, capped at two years’ pay, according to sources. A similar redundancy scheme initiated last year involving up to 240 employees cost an estimated €34 million, according to company bondholder documents published last year.
Assuming staff leaving under the current scheme were of a similar profile, the programme could cost Eir more than €106.3 million, or €141,666 per exiting employee. A spokesman for the company declined to comment.
The cost-cutting programme, first reported by The Irish Times website on Thursday is "an effort to deliver cost savings and create a leaner, more agile organisation," the company said in a statement. "Eligible staff have already or will shortly receive correspondence with a personalised financial estimate for their consideration."
Eir, which has been through more than 2,200 job cuts in the past five years under efforts to cut almost €150 million of net annual costs, currently has about 3,225 staff. The cost-cutting exercise is targeted at all grades of staff from workers in stores to managers, but excludes 1,100 of mainly field workers as the company continues to invest in its network, sources said.
Contractual commitments
“Today’s announcement does not in any way impact on the company’s ability to deliver on its recent contractual commitments in respect of our commercial rural rollout of [broadband] fibre to the home to 300,000 homes and businesses,” the company statement said.
Mr Niel's investment vehicle NJJ and Paris-listed telecoms company Iliad, in which the entrepreneur owns a 52 per cent stake, agreed in December to acquire 64.5 per cent of Eir in a deal worth €3.5 billion.
Existing Eir shareholders US hedge funds Anchorage Capital and Davidson Kempner Capital have also remained on board as part of the takeover, although Singaporean sovereign wealth fund GIC, which built up a 20.6 per cent stake last year, has exited its investment.
This week's deal marks the seventh change in ownership for Eir, formerly known as Eircom, in less than two decades.
Carolan Lennon, previously head of the company's networks and wholesale division, was installed as the new group chief executive as the deal went through, replacing Richard Moat, who signalled at the time of the takeover announcement that he was leaving the company.
Leaving telco
Eir's chief financial officer Huib Costermans also plans to leave the company in June. The men are among 45 senior staff at Eir who are set to share €100 million in exchange for their shares in the company under the purchase.
Eir's head of sport and TV Glen Killane, who was only recruited in 2016 from RTÉ, and its group marketing director Henry Drummer, are to leave the telco. They will be joined by Eir's director of corporate finance Michelle Bennett, its Simplicity programme director Paul Doyle, and Cathal Garvey, who is a finance director of Open Eir, the company's wholesale arm.
Steve Fitzpatrick, general secretary of the Communications Workers' Union, which represents about 2,500 Eir workers, said: "We will engage with the company on the detail and, in particular, to ensure that proper arrangements are put in place to cover work once the scheme takes effect."
Fórsa, the trade union which represents about 200 staff at the group, will be seeking immediate engagement with Eir management "in order to get a clear picture of the company's future," according to its assistant general secretary, Eugene Quinn.
