BUSINESS
O2 Ireland to cut jobs
13-11-2002
by
O2 Ireland will cut about 4 percent of its workforce as the firm reacts to market conditions and continues with a re-organisation that began a year ago.
A spokesperson for the company told ElectricNews.Net that around 40 jobs would be lost in Ireland from the company's Commercial Department, which handles commercial sales and marketing. The company, which employs more than 1,000 in Ireland, said the cuts would not be voluntary. Employees were briefed on the situation on Tuesday.
The cuts, which are designed to make the Irish subsidiary of mmO2 more efficient, are the result of "market conditions," according to O2 Corporate Affairs Manager Johanna Cassells. "We are also continuing with some of the restructuring action taken last year, which includes eliminating duplication of roles," she told ElectricNews.Net.
In May, following the company's re-branding from Digifone, O2 cut 45 staff when it consolidated its retail operations into a new division. At the time, the business refused to rule the possibility of more job losses.
The May restructuring also saw the firm combine Cellular World, O'Hagan Communications, Eire Communications and Access Communication into a new retail subsidiary called O2 Retail. A number of shops and offices in Dublin, Galway and Cork were closed as part of the plan.
More recently, the company has been an active proponent of site sharing as a means to cut the cost of the rollout of 3G services, a notion that Meteor has been pushing for over a year. Vodafone has not dismissed such a plan but has not yet said whether it will agree to any nationwide site sharing arrangements.
O2 is due to publish its interim financial results next week (19 November), but in its most recent fiduciary update, parent company mmO2 said that O2 Ireland was expected to report a first-half-year performance in line with expectations. No other guidance for O2 Ireland was offered in the update, but the group as a whole said it expects to achieve its projected revenue and cost goals.
In May, however, when the mobile service provider, which spans four European nations, released its last set of results, investors were disappointed by higher operating losses, even though the company beat consensus estimates for EBITDA losses. Operating losses for the year to March 2002, before exceptional items, increased to STG706 million from STG343 million a year earlier.
Furthermore, in that set of full-year results mmO2 reported increased indebtedness, despite job losses and cutbacks in capital expenditure over the past 12 months. Capital expenditure for the full-year was STG1,142 million, a 28 percent reduction from 2001. MmO2 recorded a net year-end debt of STG617 million, of which STG506 million was inherited when it de-merged from British Telecom.
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