KPN to lay off several thousand workers in The Netherlands

Dutch telecom company KPN plans to lay off 4000 to 5000 employees in the Netherlands, that announced the company Thursday.

The company will significantly reduce costs and cut about 20 to 25 per cent of the staff.

KPN reported that revenues in the Netherlands are lower than expected and plans a new strategy to strengthen the Dutch business.

KPN today announced an adjustment of its 2011 EBITDA outlook1 to > EUR 5.3bn2. The reduction is caused by recent trends in the Netherlands and accelerated investments as part of the new strategy plans, to be announced 10 May, to strengthen the market positions of the Dutch businesses.

KPN is making significant wireless portfolio adjustments in the Netherlands to address SMS and voice substitution by moving from voice to data-centric portfolios to optimize the value per customer.

The existing guidance for 2011 free cash flow is confirmed today. This is supported by a cash contribution resulting from Dutch tax facilities which allows KPN to accelerate investments to strengthen its businesses.

To further lower the cost base in the Netherlands, a new reduction program of 4,000 – 5,000 FTE, around 20 – 25% of the workforce in the Netherlands, for the 2011-2015 period has been prepared of which the majority will consist of outsourcing and off-shoring back-office activities. The multi-year reorganization costs are expected to amount to EUR 250 – 300m. The 2011 part of this amount is not included in the 2011 EBITDA outlook.

Message from the CEO, Eelco Blok
“We face negative trends in the Netherlands. I’m pleased with the strong underlying growth in Germany and Belgium where we will continue to invest. I am firmly committed to making KPN the best service provider in the Netherlands and to grow our international businesses. To make our Dutch businesses more robust I have decided to accelerate the investments related to the new strategy. I’m confident that we are taking all necessary measures to strengthen and grow our businesses and I will share my detailed KPN Group plans during the 10 May Investor Day“.

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