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Italy's major trade unions have called upon Wind Tre to eliminate their co-CEO roles in order to boost cost-savings.
January 12, 2024
The announcement comes after reports emerged that the Italian telco has set up a task force to look at ways it can make savings. Reuters has had sight of an internal memo informing staff of a new bid to cut costs and streamline operations.
The unions reacted with a joint statement including what was clearly a tongue-in-cheek comment designed to make a point. However, Slc-Cgil, Fistel-Cisl and Uilcom-Uil have – unsurprisingly – expressed their objections to talk of further cost-cutting at the telco.
"We read, not without some feelings of surprise and curiosity, about the establishment at Wind Tre of a strategic committee against waste and for the containment of operating costs," the unions said. "Instinctively, the first suggestion we would make would be to eliminate the post of the double chief executive, which must incur additional costs!"
Wind Tre has been led by co-CEOs Gianluca Corti and Benoit Hanssen for almost two years. While the unions were clearly being flippant in their reference to the leaders, they have been vocal in their dislike of the strategy pursued during their tenure, particularly the €3.4 billion sale of the telco's networks business to EQT, inked in May last year.
That deal is not yet finalised. Wind Tre is still working to reconcile its existing network-sharing deals with rivals Fastweb and Iliad with the proposed spin-off. It has until mid-February to work out the kinks.
As well as lamenting the ongoing deterioration in relations between themselves and management – it seems the unions learnt of the new cost-saving initiative from the newswires too – Slc-Cgil, Fistel-Cisl and Uilcom-Uil declared that they believe more cost-cutting is unnecessary...and took the opportunity to again decry the network sale.
"Faced with the undeniable stalemate in the network unbundling operation (an operation which this union has never believed to be the right solution to pursue, in this as in other companies in the sector, and which it therefore continues to oppose with conviction) today the current management of WindTre can't find anything better to do than launch an operation that alludes to the need to cut costs," they said. "Frankly, there is no need."
It is understandable that those in charge at Wind Tre, and parent company CK Hutchison, feel differently. Italian telecoms operators have been battling fierce competition for years, which is taking its toll on their businesses. CK Hutchison posted 3% revenue and earnings declines in the most recent quarter to the end of September, and noted that its overall active customer base fell by 784,000 on-year largely due to competition and re-pricing efforts; its decline in contract customers was less stark, but still a decline.
Nonetheless, it is the role of the unions to involve themselves in anything that could affect headcount, financial position notwithstanding.
They are calling for an urgent meeting with Wind Tre to look at the company as a whole, including the network sale plan and, in their own (translated) words, "this latest 'brilliant' initiative."
"Wind Tre's workers have already largely shouldered the difficulties of the market, both through a drastic downsizing of the workforce and a revision of the second level agreements which, for a long time now, have brought significant savings," they concluded, referencing Wind Tre's company-level pay and employment conditions.
Wind Tre hasn't formally announced any new cost-cutting endeavour, and already it is facing staunch opposition.
Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.
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