Swisscom plans even more job cuts

How long will these jobs be safe at Swisscom? Keystone

The head of Swisscom, Jens Alder, says the company is going to cut hundreds more jobs over the next few years.

Alder told German-language Swiss radio that costs had to be reduced because he saw no growth at Switzerland’s largest telecoms provider over the next three years.

Swisscom announced only on Wednesday that it was cutting about 390 jobs in 2005, mainly in the regions of Bern and Zurich.

Alder said that with prices constantly falling, the reduction of costs was “a survival strategy”.

But he did not give a precise figure of how many jobs would be axed, saying only that it would be “in the hundreds” and might vary from one year to the next.

Alder added that the reduction of the workforce would be carried out in a “decent” way.

Job killer?

He rejected criticism that Swisscom was a “job killer” and only interested in maximising profits.

“We probably offer the best social plan in Switzerland,” he said.

Alder also denied that shareholder interests were the group’s only motive for cutting staff.

“Cutting costs is a strategy for survival,” he said.

The Swiss government is the majority shareholder of the former state monopoly, with a 62.7 per cent stake.

Swisscom has reduced its workforce by 7,000 since the liberalisation of the telecommunications market and expects its turnover to stagnate at around SFr10 billion ($8.54 billion) annually until 2007.

Market share

Alder said Swisscom would continue to lose market share, mainly because of the liberalisation of the so-called “last mile”, the telephone cables that connect households to the nearest sub-station.

Swisscom also faces competition from telephony over the internet, and Alder has made it clear that the company has to look for new sources of revenue.

Among them is digital television via ADSL (Asymmetric Digital Subscriber Line), which is currently being tested in Switzerland.

Last week, Swisscom announced net profit for the first nine months of the year was SFr1.14 billion, a decline of 17.2 per cent on the same period in 2003.

It reported that turnover rose slightly to SFr7.525 billion and that it expected the figure to rise to about SFr10 billion for the year as a whole.

swissinfo with agencies

Key facts

Swisscom has cut 7,000 jobs since the liberalisation of the telecommunications market in Switzerland.
Last week, it announced it was axing 2.5 per cent of the workforce in 2005, the equivalent of about 390 jobs.
In 2003, Swisscom made a net profit of SFr1.57 billion on turnover of SFr14.58 billion.
The company now has a headcount of 15,644.

In brief

Swisscom will be shedding “hundreds” of jobs over the next few years, after announcing only last Wednesday that 390 would be cut in 2005.

Company CEO Jens Alder has told German-language Swiss radio that he expects no growth at the company over the next three years.

Turnover is expected to hover around the SFr10 billion mark annually until 2007.