Business News

Iskratel to Lay Off 120 Staff

Kranj, 07 September (STA) - Telecommunications company Iskratel will lay off 120 of its 950 staff by the end of the year and cut wages further as part of a reorganisation and cost-cutting plan that is to enable it to return to profit.

The group, which employs 700 people in Kranj, where it is based, and another 250 abroad, has launched optimisation plans to cope with a slump in revenue, according to CEO Željko Puljić.

Revenue is expected to drop to EUR 85m this year from EUR 91m last year, with the result on a par with 2012, when Iskratel generated EUR 3m in operating loss, but recorded a profit of EUR 2.2m after scrapping certain long-term provisions and correcting receivables.

The main reasons for the company's problems as cited by Puljić are the economic and financial turmoil, tough competition from China, low prices, operators' cut-back on investment and buyers' wavering over investments.

"Given the situation on the telecommunications market, it is considered a success today even to survive and to get ready for future growth," Puljić has told the STA.

As part of the reorganisation, Iskratel formed two business units with one combining products and solutions for telecommunications operators and the other for corporate customers.

The company also centralised operating processes, logistics, administration, finances and staff and trimmed down the three-member management board to a single member.

According to daily Delo, a majority of Iskratel stock represent own shares. Iskra Telekom Holding, whose sole owner is Iskartel, holds 21.8% and the remaining 17.5% is held by Fintel, the company owned by managers and employees.

The ownership structure changed after German industrial giant Siemens sold its 47.7% stake in the company in 2009 and the bank Gorenjska banka offloaded 25% later.

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