Telkom plans to lay off workers

Telkom plans to lay off workers

JAKARTA (JP): State-owned telephone operator PT Telekomunikasi
Indonesia (Telkom) is considering laying off some 3,000 to 4,000
workers to improve efficiency and raise the company's value, a
source has said.

Antara newswires reported on Sunday that the dismissals, in
the form of an early retirement program, would be targeted at
employees in the lower levels.

The early retirement program would start beginning next year,
the source said, adding that the lay-off measure would not cost
Telkom as much as it had in 1995 when it dismissed about 6,000
workers.

Telkom employs more than 38,000 workers in seven divisional
regions across Indonesia.

Telkom investor relations manager Setiawan Sulistyo confirmed
that the company was looking into cutting manpower as part of its
program to boost business efficiency.

"At present it (layoffs) is just an idea. It has not been
conceptualized nor taken to the board meeting," he said, adding
that the company hoped to implement the move by next year.

Telkom is under pressure to increase its value in light of the
government's plan to remove its exclusive rights in domestic
telecommunications service in 2002.

The move to let go of thousands of workers was not the first
to happen in the company's history.

In 1995 the company, facing upcoming initial public offerings
in domestic as well as international capital markets, decided to
let go of 6,000 of its staff.

For that, the company allocated some Rp 300 billion, about 80
times an employee's salary, to compensate those wishing an early
retirement.

Setyanto P. Santosa, who was Telkom's president, said then
that the move was necessary for the company to get up to
international standards.

The employees targeted in the early retirement program in 1995
were those about 46 years of age and had been working with Telkom
for 25 years. (tnt)