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OTE Downsizing 13% in Fixed-Line Telecommunications

In an attempt to reduce its legacy costs OTE, the largest telecommunication company in Greece announced its intent to downsize its workforce in the fixed-line business.
Chief Executive Michael Tsamaz said that 1,100 people, that is 13% of the fixed-line personnel will leave through voluntary redundancy.
OTE provides telecommunication services in all of Greece, Romania and Albania. Deutsche Telekom, one of its main shareholders, is focusing on stabilizing the fixed-line business because of its inefficiency to provide substantial profits.
A company that would prefer to remain anonymous estimated that the cost of OTE’s Voluntary Redundancy Program will be from 120 million to 200 million. The numbers are of course proportional to the number of people who will decide to leave.
This marks the third year OTE has not made any profit for its shareholders. The financial crisis in Greece, the hard regulations and the competitors in the same field have reduced OTE sales by a quarter. Nearly one-third of the fixed lines have been transferred to competitive companies since 2009. In order to make up for the loss in profit OTE provides customers with cable television and broadband services.
Greek legislation does not allow mass lay-offs so the only way for large companies to reduce expenses is the Voluntary Redundancy Program. This scheme will also be used by Eurobank and Hellenic Petroleum who are planning to reduce their personnel by 10%.

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