Bulgaria cheaper

Job cuts at A1 threaten thousands of jobs

Employees have been reduced for years; since 2019, the number of employees has fallen by 1100, with more likely to follow.

(Bild: APA/HERBERT PFARRHOFER)

There are rumblings at A1 Telekom Austria: as the newspaper "Krone" has learned, staff cuts could be imminent in the next few years. 2,000 to 3,000 of around 6,500 jobs are likely to be at stake here in Austria and could move to Bulgaria. An extraordinary supervisory board meeting is now being convened and works meetings are planned.

In the past three to four years, the Group Management Board has already massively cut jobs in Austria and outsourced them to Bulgaria. As a result, Telekom has 1100 fewer employees than in 2019. According to reports, A1 wants to relocate all "non-market-related" activities wherever possible. Functions are bundled in so-called CDCs (competence centers). These are location-independent activities that can be carried out virtually, the company emphasizes. Also from Austria. The aim is to bundle activities and not carry them out multiple times, they say.

Telekom Austria boss Alejandro Plater is saving personnel costs in Bulgaria.

(Bild: APA/HANS KLAUS TECHT)

However, A1 staff representatives are very critical of this: "With the establishment of the A1 Group Competence Center in Bulgaria, the Group Management Board is taking a further step that could result in painful cuts for the Austrian site," say works council members Alexander Sollak and Gerhard Bayer in a joint statement.

Important decisions could then increasingly be made in Bulgaria. "It is to be feared that Austria will be downgraded to a pure sales company in the medium term and everything else will be done abroad," emphasizes staff representative Sollak. It would then de facto be a Bulgarian company with headquarters in Vienna. However, key corporate functions could be controlled from Bulgaria.

Will the Republic of Austria oppose this?
However, the Republic of Austria, as the 28 percent co-owner, could take action against this. It will therefore probably take a close look at which competencies remain in Austria and which do not. The syndicate agreement between the owners ÖBAG and América Móvil stipulates that all key business and corporate functions must be maintained in addition to the headquarters location. However, this would be questionable in the event of a massive outsourcing. In any case, ÖBAG wants to prevent important functions from being removed from Austria through the back door, according to an insider.

The clear focus on Bulgaria is already evident in numerous (internal) tenders. The CDCs are structured as follows: There is a Group CDC, which is headed by a board member of the Bulgaria subsidiary, as well as several CDCs that bundle sub-themes, so to speak. These are advertised as being based in Sofia, but experts from Austria can work here. However, the works council fears that this will lead to significant redundancies in Austria. A concrete example: in IT alone, 300 out of 1000 employees are likely to have to leave as part of the "reorganization".

The company has now responded in a statement and has not confirmed the reported figures of 2,000 to 3,000 employees affected.