Tue, 21 Nov 2000

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)