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Telecom Italia will cut thousands of jobs as part of a plan to cut

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The Tim logo is seen at its headquarters in Rome, Italy, November 22, 2021. REUTERS/Yara Nardi

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  • Italian TIM presents restructuring plans
  • At least 9,000 jobs cut by 2030
  • Agreement to combine the network with Open Fiber is the preferred option

ROME, July 7 (Reuters) – Telecom Italia (TIM) (TLIT.MI) could cut more than 9,000 jobs by 2030 and is ready to offload its fixed network business under a plan that would reshape the former telecommunications monopoly in debt.

Italy’s biggest telecoms company is struggling with a net debt of 23 billion euros ($24 billion) while facing falling revenues in its fiercely competitive home market.

Under a strategic plan unveiled by new CEO Pietro Labriola on Thursday, TIM said it would divest its nationwide fixed access network and submarine cable unit Sparkle to a separate company called NetCo, which would bring up to ‘about 11 billion euros of the company’s debt.

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The plan for Labriola, TIM’s fifth CEO in six years, is to cut thousands of jobs from its 41,000 employees by 2030. He touted it as one of the most significant transformations of a company from telecommunications legacy in Europe.

Labriola told analysts the job cuts would be based on an existing early retirement program and talks were already underway with unions.

A central part of the restructuring is a possible deal to combine NetCo with rival Open Fiber, allowing state lender CDP to take control of a combined entity that would aim to improve broadband coverage and speeds for Italians. .

Labriola said an Open Fiber deal was the preferred option and could be completed by the end of October, but added that there is a plan B in the form of NetCo stake sales.

NetCo’s valuation is a sticking point with TIM’s major shareholder Vivendi , which is pushing for TIM to get a top price in ongoing negotiations over a potential Open Fiber deal. Read more

DEBT REDUCTION

TIM is also counting on transactions such as the sale of a minority stake in the newly created business services unit to reduce overall net debt below €5 billion, from a pro forma level of around €20 billion. in the first trimester.

Shares of TIM lost their initial gains and traded down 1.2% at 11:30 GMT to just over 0.25 euros, not far from the record low of 0.22 euros reached in March.

Analyst Andrea De Vita said the job cuts would cost around 2 billion euros and noted there was little news on the potential Open Fiber deal or the sale of other parts of the company. ‘company.

TIM said its services business will include the Brazil-listed unit TIM Brasil (TIMS3.SA) and the domestic services business, which will be split into two units, each with specific financial objectives.

Besides the consumer branch, the company will combine connectivity services for large enterprises and public administrations as well as for cloud, cybersecurity and Internet of Things companies.

($1 = 0.9799 euros)

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Reporting by Elvira Pollina Editing by Keith Weir and David Goodman

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