The Italian operator is moving to streamline its domestic workforce as it attempts to cut costs by €1 billion by 2024
Around the end of 2021, Italian incumbent operator TIM was under enormous pressure from stakeholders to make major changes to the organisation, having failed to achieve notable improvements to its financial performance for numerous years. Couple this with a divisive €10.8 billion takeover offer from US private equity firm KKR and it was clear that the company was at a significant crossroads.
Change came in the form of new CEO Pietro Labriola in January, who brought with him a plan to restructure the business, separating the company’s valuable fixed network unit from its service businesses. Since then, the company has received significant investor interest in both units, with major progress also being made on the creation of the controversial single national fibre network by merging TIM’s fibre network with that of rival Open Fiber.
Labriola’s strategy, however, not only included an internal restructure, but also achieving cost savings of €1 billion by 2024, some of which would be achieved through job cuts. By February, sources were suggesting that up to 20% of the company’s Italian staff, roughly 8,000 people, could be at risk of losing their jobs.
Labour unions, naturally, strongly opposed the reorganisation on these grounds, calling it a “mistake in every respect” in a letter to Prime Minister Mario Draghi.
Now, new reports suggest that the first round of job cuts being made by TIM will see 1,200 jobs eliminated through a voluntary early retirement scheme.
Discussions with unions reportedly began on 16 May this year, with much focus spent on reskilling the workforce over the coming years to prevent redundancies.
An agreement has seemingly been signed by TIM and numerous unions, including, SLC-CGIL, FISTel-CISL, UILCom-UIL, and UGL Telecomunicazioni, to limit the job cuts to 1,200 by November this year.
Given previous reports, it seems unlikely that TIM’s job cuts will ultimately be capped at just 1,200, equating just 3% of the company’s 42,500-strong workforce. Indeed, the extent of further cuts will presumably be largely dependent on the outcome of the joint venture with Open Fiber, which would absorb a significant portion of TIM’s staff.
Further details about Labriola’s plans for TIM are expected to be revealed at the company’s next financial event, its Capital Market Day on 7 July.