OTE personnel exodus to be followed by radical restructuring by July 2005

The management at telecommunications company OTE is willing to pay dearly in order to rid itself of some 6,200 employees. Chairman and CEO Panagis Vourloumis announced on Friday that the voluntary retirement program will cost at least 1 billion euros. According to sources, the management is willing to offer full pension rights to employees eight years away from retirement in order to secure the favorable opinion of OME-OTE, the company’s powerful union. In this case, it will be OTE, and not the employees’ pension fund, which will pay the retirement benefits until the employees reach the normal pensionable age. If this is to be the case, the benefits for OTE’s finances will not show in the immediate future and may actually push the parent company deeper into the red. According to Greek accounting standards, OTE posted a 10.3-million-euro deficit during the first nine months of 2004. The personnel cuts will be followed by a radical restructuring of the company, if it adopts the recommendations of consultants McKinsey. It appears that McKinsey proposes, among other things, to cut the existing 12 regional divisions to four or five and wants job cuts to begin at headquarters. The consultants propose that the new organization chart be fully implemented by July 2005.