Do Rostelecom employees oppose layoffs? Rostelecom is planning mass layoffs of its employees

Rostelecom has fired 25.2 thousand employees over the past three years as part of its transformation from a classic fixed-line operator to a digital services provider.

As a result, the company increased average revenue per employee by 21%, up to 2.3 million rubles. per year, but still lags far behind the level of the largest Russian mobile operators. Until 2020, Rostelecom is preparing to lay off another 14-24 thousand people, but the process may be complicated by trade unions.

In 2017, Rostelecom laid off 8.8 thousand employees, at the end of the year the company employed 133.7 thousand people, follows from the materials of the operator to the annual reporting on international standards. This was confirmed to Kommersant by a representative of Rostelecom. The cuts are part of a program to improve operating efficiency launched at Rostelecom in 2014 under the operator's former president, Sergey Kalugin. By the end of 2014, the company employed 158.8 thousand employees. In 2015, their number decreased by 5.6%, to 149.9 thousand. In 2016, another 4.9% were fired, to 142.5 thousand people. In 2017, the rate of cuts accelerated to 6.2%. At first, Rostelecom planned to cut employees by 7-10% per year until 2018. In December 2015, the strategy was updated, setting a target for the number of employees in 2020 - 110-130 thousand people.

The rate of reduction of Rostelecom's staff in absolute terms will decrease, and the target number of employees as part of the company's strategy is 110-120 thousand people, Kommersant specified financial director Rostelecom Kai-Uwe Melhorn. “With the transition to digital, there will be both partial layoffs and hiring of employees with new digital competencies. We also contribute to retraining projects, this is a fairly large investment in personnel development. We give employees the opportunity to learn digital skills,” Mr. Mehlhorn emphasized.

In 2016, the optimization of the staff allowed to reduce personnel costs by 1%, according to Rostelecom's annual report. But in 2017, personnel costs increased again - by 3%, to 93.4 billion rubles. The materials of the operator explain that this was affected by the accrual of a reserve under the new long-term motivation program, the transition to a new corporate pension program, as well as the growth of the payroll due to a change in the structure of the personnel due to digital transformation. Rostelecom sets the task of increasing revenue per employee and reducing the share of the payroll fund in total expenses, Mikhail Oseevsky, president of the operator, told Kommersant.

In 2014, revenue per employee of Rostelecom amounted to 1.9 million rubles, and at the end of 2017 it reached 2.3 million rubles. According to this level, Rostelecom is inferior to the largest mobile operators, Raiffeisenbank analyst Sergey Libin states. In MTS, this indicator at the end of 2016 amounted to 6.3 million rubles. in MegaFon - 9.9 million rubles, in Vimpelcom - 11.6 million rubles. Fixed-line operators have higher personnel costs, including equipment adjusters who provide Internet to households, explains Mr. Libin: if three cellular operators have personnel costs of 8-10% of revenue, then Rostelecom has about 30 %. According to this indicator, Rostelecom is closer to the German telecommunications giant Deutsche Telekom, the analyst believes. So, in 2017, Deutsche Telekom's personnel costs amounted to €15.5 billion with 216.5 thousand employees and revenue of €74.9 billion. That is, the wage fund accounted for 20.7% of revenue, and revenue per employee was € 346.2 thousand per year (compared to approximately €34.9 thousand in Rostelecom at the weighted average rate for 2017).

Rostelecom has long taken a course towards optimization in order to make the company compact, while some of the employees were taken out of the state for outsourcing with the preservation of functions, said Anatoly Nazeykin, chairman of the trade union of communications workers of Russia. At the same time, the trade union has not received any official information about layoffs of up to 23.7 thousand people planned in Rostelecom by 2020, he emphasizes. This is a very serious reduction - if the plans are confirmed, Mr. Nazeykin emphasizes, the trade union is ready to enter into negotiations with Rostelecom, at which the fate of each employee to be laid off will be discussed.

Rostelecom will lay off half of its employees within ten years

Rostelecom's management is developing a program to improve the efficiency of its business. The operator will need up to $10 billion to modernize communication networks alone. But these investments will have a quick effect: the company will be able to halve the number of employees and keep the profitability of operations at a high level.

At the end of December, Rostelecom's board of directors will consider a draft program for the development of local telephone networks. Mikhail Magrilov, vice-president for strategy of the operator, spoke about this. According to him, if the council is satisfied with the document, it will be adopted in the first quarter of 2013.

Many managers

The first thing the program draws attention to is the proposal to cut Rostelecom's staff by half by 2023. Moreover, proposals for optimization relate primarily to the administrative and managerial personnel of the operator. Already in 2013 it is planned to lay off 20% of such employees. "This will reduce operating costs by 1.3 billion rubles in 2013, and the main effect will be in 2014 - costs will be reduced by another 3.5-4.5 billion rubles," said Mr. Magrilov.

The operator intends to completely eliminate regional and inter-district communication centers, where about a thousand managers work. It is planned to centralize a number of functions, such as the development of products and solutions for the access network at the level of the corporate center in Moscow (to reduce profile managers at the regional and macro-regional levels). Regional branches with revenue below 1 billion rubles. it was proposed to merge, and in the corporate center in Moscow to switch to a flat management system and get rid of 30% of departments within departments.

In the long term, the reduction will also affect the technical block, which today employs about 98 thousand specialists servicing automatic telephone exchanges, cable communication lines and the "last inch" of subscriber access. In the next year or two, this line can reduce costs by 500-700 million rubles. per year, suggests the vice-president for strategy of Rostelecom.

Rostelecom currently employs 165,000 people, while the Big Three operators employ about 20,000-30,000. The salary fund represents a significant item in the operator's operating expenses.

goodbye honey

To make the state compact and keep profitability at the level of 40%, in the long term, a complete modernization of the existing fixed communication network is required, Rostelecom believes. Copper cables should give way to fiber optics, and energy-intensive PBXs to Softswitches. The technical upgrade will cost "about $10 billion" in terms of capex over the next ten years, the company calculated.

The Board of Directors will be told how these investments will pay off: new-generation communication networks will make it possible to halve operating costs, they need to be serviced less often and this can be done with a smaller staff, the vice president of Rostelecom explained. "As regards the choice of technology for modern networks access, then such a decision should be systematically made at the federal level, - said Mr. Magrilov. “Depending on the building density, the level of competition in each city and other factors, the network will be built using GPON or FTTX technology.” Previously, which technology to give priority to was decided at the level of macro-regional branches.

Such a massive increase in capital expenditure is likely to require approval at general meeting shareholders. In the adopted strategy until 2015, Rostelecom must maintain the ratio of capital costs to revenue up to 20%, it is still unknown how the main shareholder, the state, will react to the growth in capital costs. Communications Minister Nikolai Nikiforov and Deputy Prime Minister Arkady Dvorkovich traditionally evaluate the effectiveness of capital expenditures.

Active sales

Great emphasis in the efficiency improvement program is placed on the quality of sales and service. Now regional sellers are not sufficiently interested in attracting retail and corporate clients, the company admits. "At the time of the merger, the motivation system in a number of regional branches worked like this: only 5-10% of the seller's salary was formed at the expense of the bonus, and the rest was provided to him," Mr. Magrilov explained. The weight of the variable part should increase substantially to increase employee motivation.

The retail network will also be reformed. "Now the company is considering two scenarios for the development of retail - the creation of a separate business unit with a corporate center in Moscow or the transfer of the entire network under the control of a 100% subsidiary of Rostelecom," the operator's vice president said.

In terms of sales development, the operator also singled out the ten worst cities in terms of market share in the corporate segment. In order to increase revenues from this segment, Rostelecom is going to speed up the connection process in these cities and strengthen quality control when commissioning objects from the commercial block.

Rostelecom has fired 25.2 thousand employees over the past three years as part of its transformation from a classic fixed-line operator to a digital service provider. As a result, the company increased average revenue per employee by 21%, to RUB 2.3 million. per year, but still lags far behind the level of the largest Russian mobile operators. Until 2020, Rostelecom is preparing to lay off another 14-24 thousand people, but the process may be complicated by trade unions.

In 2017, Rostelecom laid off 8.8 thousand employees, at the end of the year the company employed 133.7 thousand people, follows from the operator's materials for annual reporting in accordance with international standards. This was confirmed to Kommersant by a representative of Rostelecom. Reductions - a part of the program of increase in the operational efficiency started in Rostelecom in 2014 at the former president of the operator Sergey Kalugin. By the end of 2014, the company employed 158.8 thousand employees. In 2015, their number decreased by 5.6%, to 149.9 thousand. In 2016, another 4.9% were fired, to 142.5 thousand people. In 2017, the rate of cuts accelerated to 6.2%. At first, Rostelecom planned to cut employees by 7-10% per year until 2018. In December 2015, the strategy was updated, setting a target for the number of employees in 2020 - 110-130 thousand people.

The rate of staff reduction at Rostelecom in absolute terms will decrease, and the target number of employees as part of the company's strategy is 110-120 thousand people, Kai-Uwe Mehlhorn, financial director of Rostelecom, specified to Kommersant. “With the transition to digital, there will be both partial layoffs and hiring of employees with new digital competencies. We also contribute to retraining projects, which is a fairly large investment in staff development. We give employees the opportunity to learn digital skills,” said Mehlhorn.

In 2016, the optimization of the staff allowed to reduce personnel costs by 1%, noted in the annual report of Rostelecom. But in 2017, personnel costs increased again - by 3%, to 93.4 billion rubles. The materials of the operator explain that this was affected by the accrual of a reserve under the new long-term motivation program, the transition to a new corporate pension program, as well as the growth of the payroll due to a change in the structure of the personnel due to digital transformation. Rostelecom sets the task of increasing revenue per employee and reducing the share of the payroll fund in total expenses, Mikhail Oseevsky, president of the operator, told Kommersant.

In 2014, revenue per employee of Rostelecom amounted to 1.9 million rubles, and at the end of 2017 it reached 2.3 million rubles. According to this level, Rostelecom is inferior to the largest mobile operators, Raiffeisenbank analyst Sergey Libin states. In MTS, this indicator at the end of 2016 amounted to 6.3 million rubles. in MegaFon - 9.9 million rubles, in VimpelCom - 11.6 million rubles. Fixed-line operators have higher personnel costs, including equipment adjusters who provide Internet access to households, explains Mr. Libin: if three cellular operators have personnel costs of 8-10% of revenue, then Rostelecom has about 30 %. According to this indicator, Rostelecom is closer to the German telecommunications giant Deutsche Telekom, the analyst believes. So, in 2017, Deutsche Telekom's personnel costs amounted to €15.5 billion with 216.5 thousand employees and revenue of €74.9 billion. That is, the wage fund accounted for 20.7% of revenue, and revenue per employee was € 346.2 thousand per year (compared to approximately €34.9 thousand in Rostelecom at the weighted average rate for 2017).

Rostelecom has long taken a course towards optimization in order to make the company compact, while some of the employees were taken out of the state for outsourcing while maintaining functions, said Anatoly Nazeykin, chairman of the trade union of communications workers of Russia. At the same time, the trade union did not receive any official information about layoffs of up to 23.7 thousand people planned in Rostelecom by 2020, he emphasizes. This is a very serious reduction - if the plans are confirmed, Mr. Nazeikin emphasizes, the trade union is ready to enter into negotiations with Rostelecom, at which the fate of each employee to be laid off will be discussed.

Rostelecom clarified the size of staff reductions in 2015: the number of employees will decrease by 7.9-11.1 thousand people, more than a third of them are managers of different levels

Rostelecom office building in Moscow (Photo: RIA Novosti)

For the sake of efficiency

Rostelecom announced its intention to optimize the number of employees back in November 2014. Now the company employs 158 thousand people. Every year this number will decrease by 5-7% starting from 2015, Representative of the operator Andrey Polyakov. This year, the main blow will fall on administrators and managers, promised the president of Rostelecom Sergey Kalugin:“In 2015, the company plans to cut 15% of its administrative and management staff – about 2.5% of total strength company employees".

According to his calculations, this will save about 4.3 billion rubles. in year.Managers of different levels will be reduced: from individual top managers to line managers, Polyakov explained, adding that“Project implementation involves the “flattening” of structures and the elimination of “excessive” layers of management in all functions at all levels of management verticals.”

It is also planned to reform retail and remote service systems, unify IT infrastructure and other sectors. Employees of retirement age will be the first to be laid off. As a result, Rostelecom plans to increase labor productivity: the share of total revenue attributable to one employee should increase from about 1.96 million rubles. by 15%.

Not everyone will cut

VimpelCom is also going to optimize costs by reducing staff, the company's CEO Mikhail Slobodin said this during the summing up of 2014: “The question is not so much how to spend less, but how to get more out of what we spend . We already carried out headcount optimization last year, and we will carry it out this year as well. We are transferring some of the employees to outsourcing, and some will simply be optimized [fired].” Now VimpelCom employs approximately 24.5 thousand people, and the operator's revenue for 2014 amounted to almost 281.9 billion rubles, or about 11.5 million rubles. per employee.

The press service of MegaFon specified that the company's staff includes about 30 thousand people. In 2014, revenue amounted to 314.8 billion rubles, or approximately 10.5 million rubles. per employee. Asked about the possibility of reductions operator representative Aliya Beketova replies evasively:"We're not looking to cut or grow staff this year."

MTS representative Dmitry Solodovnikov said that the operator, on the contrary, intends to increase the number of staff. “We do not need to rebuild or cut anything on purpose in order to become more efficient. On the contrary, in some areas we do not exclude the possibility of an increase staffing to strengthen its position in the market,” he stressed. According to Solodovnikov, the company employs about 60 thousand people, only in Russia about 30 thousand work. MTS will report for 2014 only on Tuesday, March 17; according to Uralsib's forecast, the group's revenue will amount to almost 408 billion rubles, that is, approximately 6.8 million rubles. per person.

Konstantin Prokshin, a representative of the T2-RTK company operating under the Tele2 brand, said that the operator also does not plan to reduce staff. “The launch of 3G and 4G networks, access to new regions, including Moscow, will require the involvement of a large number of professionals in the processes,” he said. Now the company employs 8.5 thousand people.

Without mobile communications

According to Kalugin, 2014 was the first year of Rostelecom's development in new strategy: the operator refused mobile business, concentrating on fixed communications and providing digital services. Mobile assets were transferred to T2-RTK, in which Rostelecom owns 45% , more 27,5% - VTB.

In last year's revenue, the results of Rostelecom's mobile subsidiaries are taken into account only for the first months of 2014 - a little less than 12 billion rub., a year earlier this business brought almost 35 billion rub. Rostelecom's revenue in 2014, excluding mobile communications, amounted to 298.9 billion rub., or 3% more than in 2013. Consolidated revenue, including mobile services, decreased by 5% , before 310.9 billion rub.

Revenue from the provision of fixed-line services telephone communication falls: so, for local calls in 2014, the operator received 80.5 billion rub., or 8% less than a year earlier. Lost revenues are offset by growth in more promising sectors - broadband access and pay TV.

Net profit of Rostelecom, excluding mobile communications, decreased by 51% , before 13.2 billion RUB: the company explains this by the revaluation of financial instruments and the high base of 2013.

In the next three years, the leading Russian telecom operator Rostelecom plans to cut a quarter of its employees- 10-12 thousand annually. Considering that now Rostelecom personnel (without subsidiaries) has about 150 thousand people, almost 36 thousand workers will lose their jobs.

What is it for? And all for the sake of the same - for the sake of increasing profits by a sharp increase in the exploitation of the remaining workers. After all, it is no coincidence that the company's management declares that it intends to achieve labor productivity indicators at the level of the best companies in the world, comparable in type and scale of activity. In particular, the amount of revenue per employee is planned to increase from 1.8 million rubles in 2013 to 2.5 million rubles in 2018, according to the presentation of Rostelecom. This means that by reducing a quarter of employees, the exploitation of the remaining will increase by almost 40%.

Only due to net savings on salaries, Rostelecom, whose payroll is now more than 47 billion rubles, will receive almost 12 billion in profit. And in terms of total personnel costs, the savings (that is, profit in the pocket of the company's owners) will amount to more than 17 billion rubles.

Considering, moreover, that Rostelecom is modernizing equipment, switching from analog and digital equipment on a new generation of soft switches (Soft Switches) and building fiber-optic communication lines, the company's profits will increase even more.

There is a reason to give a damn about the conscience and interests of the working people, right?

The president of Rostelecom, Sergey Kalugin, of course, promises that the rest can rejoice, because, they say, by reducing the staff, the company will increase the wages of those of its employees who manage to avoid being fired. Yes, but it's hard to believe. Until now, no "optimization" of this kind has led to an increase in wages at least for ordinary personnel. Yes, the remuneration of top management may well increase. But those who account for the creation of all the profits of the company will have to work much more and, at best, for the same money, if not less.

Why? Yes, because the laid-off employees will increase the army of the unemployed, which means the price work force the labor market will decline. Why would the management of Rostelecom pay its employees more if the labor exchange is full of those who, in order not to die of hunger, will agree to work for less money?

Therefore, none of the hired workers of Rostelecom will not seem enough - neither to those who will be laid off, nor to those who are “lucky”.

What to do? Fight without letting anyone get fired! Methods and forms of struggle are known. And the main thing in the victory over the employer is the unification of the workers and their class solidarity. And this is not just our good wish, it is a vital necessity for the Rostelecom employees themselves if they want to survive.

S. Agapchenko