Hrvatski Telekom D.D. GDR (each Repr 1 : Hrvatski Telekom announces headcount reduction

Hrvatski Telekom announces headcount reduction

10.1.2012

• Within the scope of the restructuring process, about 450 workers will leave HT
  
• The average severance pay per employee is a gross amount of approximately 360,000 HRK - on average, six times more than the amount prescribed by law

Within the scope of the restructuring process, Hrvatski Telekom (HT) plans to reduce the number of employees, laying off approximately 450 workers. The reasons for such headcount reduction are related to trends on the telecommunications market and to new circumstances in business operation. In addition to the global trend of decreasing revenue from telecommunications core businesses, the decrease of the overall value of the Croatian telecom market from 15 to 13 billion HRK throughout the last three years, the ever-increasing impact of competition, regulatory changes and decreased purchase power in Croatia, a substantial factor are also investments made by the Company in advanced technology, development of services and infrastructure and improvement of business processes.

HT's approach to the headcount reduction and surplus management process is marked by full social sensitivity and responsibility. When leaving the Company, employees are paid out severance packages in average gross amounts of 360,000 HRK, which equals two years of average salary at HT and which is the highest amount granted as severance pay in Croatia, on average, six times more than the amount prescribed by law.

During the notice period, employees do not have to come to work while keeping all the rights resulting from the Collective Agreement. The extremely successful "Support Plus" Program provides employees with many services; qualified experts are available to offer advice in coping with the labor market or, respectively, in managing their employment status. Workshops have been organized and brochures printed to make employees familiar with the labor market and ways to place themselves on the market to their best advantage, and all this is made available to them on special web pages which they may access during the notice period. Expert workers of the "Support Plus" Program stay in touch with employees who have left the Company and are at their disposal for a minimum of six months after their departure.

In the process of preparation of the Surplus Management Program, HT is applying additional criteria, in addition to the ones defined by the Labor Act (years of service, age and support obligation), and is taking additional measures to open the possibility of employment at other job positions within the Company or at affiliated companies.

HT has been topping the "Most Desired Employer" lists for years, also during the continuous restructuring process, which only proves the fact that the Company is being managed in a responsible manner. Headcount reduction is a part of the necessary business optimization process, aiming to preserve operational efficiency in difficult economic circumstances and to ensure the stability and future of business operation.

About Hrvatski Telekom:
Hrvatski Telekom is the leading provider of telecommunication services in all segments in Croatia, serving more than 1.3 million fixed lines, nearly 2.5 million mobile subscribers and 648,000 broadband connections through its Residential and Business divisions.
All rights granted by Hrvatski Telekom to its employees exceed the Croatian average many times over, such rights being guaranteed by the Collective Agreement.
HT's annual investments in employee education exceed 10 million HRK, and throughout the year, employees are paid out a performance bonus, annual vacation bonus, Christmas bonus, Christmas gift for children allowance, Easter gift voucher and additional payouts for important life events.
Special attention goes to health care; employees are offered free of charge medical checkups and free of charge sports activities in selected sports centers throughout Croatia.