Telkom mulls layoffs for 4,000 by 2015

State-owned telecommunication company PT Telkom is considering laying off 4,000 employees by 2015.

The layoffs will be carried out through offers for early retirement as part of a move to create efficiency, a company executive said.

PT Telkom human capital and general affairs director Faisal Syam said the number of employees to
be dismissed next year would be decided after the company’s budget and working plan (RKAP) were drawn up.

“We have a burgeoning number of employees, some 19,000. That’s why we have to cut the number by offering early retirements,” Faisal said in Surabaya, East Java, recently.

Mass layoffs, according to Faisal, were also necessary because of the company’s high effectiveness, especially because the technology it uses does not need many employees.

“The measures are also a way of reducing operational costs that keep on swelling, year after year,” Faisal said.

Faisal declined to mention amount of money that the company was prepared to pay as severance to employees who chose early retirement.

“We are still working on it,” he said. The company reportedly has spent a great deal of money on early retirements.

In the third quarter of 2010, according kabarbisnis.com, the company spent Rp 629 billion (US$69.81 million) for the early retirements of 762 employees as of Oct. 1.

PT Telkom started offering early retirements in 1995, when 5,188 employees left, according to the company. The program has continued to the present. Between 2002 and 2010, 12,500 employees have accepted early retirements.