Sri Lanka Telecom (SLT) is to reduce staff to 3,500 from around 6,000 through its manpower restructuring’ methods including Voluntary Retirement Scheme (VRS), and recruitment freezes, in an effort to stem losses, SLT union officials said.
SLT reported a loss of Rs. 214 million during the 4th quarter of 2009, the officials said adding that the company has spent Rs.480 million on VRS reducing the headcount by 310 employees last year. Another 100 employees have been sent on VRS during the first three months of this year, making it a total of 1212 employees that have received the golden hand shake so far since 2006.
Union officials however claim that even with the reduction in the salary bill, the company has failed to manage costs or reversed the declining trend in revenues. They charged that top officials including the Chief Executive Officer are being paid massive salaries and receive many perks. S. K. Lal Ranjith, Chief Corporate Officer, SLT, responding to the allegations, told the Business Times that he is unaware of a plan to reduce staff to 3,500 to tackle losses in the company. However he said that an immediate strategic plan has been implemented to tackle the global financial crisis and also the ever increasing operational costs.
He noted that the environment is heavily competitive at present with a number of service providers, and that the SLT is spending around Rs.800 million for public relation activities and advertising as it is essential to promote the SLT brand in a competitive environment. “This is only 2% of the SLT revenue,” he said .
He further noted that SLT’s VRS came into effect as a result of its restructuring plan to improve productivity.
The scheme will help the company to right size and re-engineer its work force based on the actual demand. The average age of the staff, which is presently 45 years, will fall enabling SLT to keep the right blend of the age of its staff. The right blend and higher skill levels of staff are absolute necessities in an era where the company is facing stiff competition, he said.
But trade union officials say the company led by CEO Greg Young is going ahead with a transformation program introduced by a British consultancy firm ignoring the present financial crisis situation of the SLT.
They pointed out that the SLT experienced a 21% increase in its operating costs including overheads during 2009 mainly due to high salaries paid to some employees of the company including the Rs. 8 million salary of the CEO, compared to earlier, when the NTT-appointed Japanese CEO was paid a salary of Rs. 4.5 million. Asked to respond, Mr. Lal Ranjith said that he cannot comment on salaries of other officials, as it is a confidential matter. |
E-mail
