KPN cuts 800 jobs, KLM earns a profit

22 January 2004

AMSTERDAM — As telecoms company KPN said on Thursday it will cut another 800 jobs this year, Dutch airline KLM reported a financial turnaround by recording a EUR 8 million profit in the third quarter of its 2003-04 financial year.

The KPN job losses will occur in its landline division, 300 of which will be forced redundancies at its headquarters in The Hague The remaining 500 jobs losses will occur via natural attrition, news agency ANP reported on Thursday.

KPN said the job cuts were due to plans to improve efficiency and the introduction of new technology. The telecoms firm said the reorganisation was necessary as its landline division battled increased competition and lower prices. It also said more and more customers were opting to only have a mobile phone in place of a landline connection.

KPN is allocating EUR 20 million in the first quarter of this year to fund the restructuring and the company will also contact its employees’ works councils and unions for advice.

But for the Central Works Council COR, the job losses will not come as a surprise, having previously announced in October that it was expecting a series of job cuts. COR said at the time it would resist forced redundancies.

Union Abvakabo FNV said it understood the job cuts were necessary due to technological changes and increased competition, but demanded that KPN assist sacked workers find new work. Director Daniëlle Wiek also said the union accepted that forced redundancies were unavoidable.

KPN sacked 5,280 workers between the end of 2001 and the end of 2003. But via a wage freeze, early retirement, the non-extension of contracts and internal transfers, the number of forced redundancies was limited to several hundred jobs, a company spokesman said.

But due to the fact that KPN has already been subjected to strong economising measures, job cuts via natural attrition are becoming increasingly difficult, newspaper De Volkskrant reported.

Meanwhile, KLM reported a EUR 8 million profit in the third quarter of 2003-04, compared with a EUR 66 million loss in the same period last year, a nu.nl news report said.

The profit comes despite a 7 percent decline in turnover to EUR 1.5 billion and the company attributed the profit due to cuts in expenses. Savings were particularly made in its passenger division.

KLM is expecting a positive operation result and a break-even net result for the full 12 months of 2003-04, having recorded a loss of EUR 416 million in the 2002-03 financial year due to fears over the Sars virus and the war in Iraq.

Subject: Dutch news + finance