Job cuts are inevitable at the newly reconstituted Olivetti PC company, while management changes are also likely. This means that Olivetti faces a confrontation with the Italian unions next month.
Bernhard Auer, who heads up the PC division of Olivetti - spun off last month to a group of investors named Piedmont - said yesterday at the Cebit fair in Hanover that some streamlining of the company was inevitable. He will share his job as chief executive with Alex Barberis, who will look after operations, finance and logistics.
Auer said: "The majority of the restructuring has happened. Last year we were split off as an integrated business. As far as our current course of action is concerned, you will have to adjust the workforce and the salesforce to a revenue level and margin level."
That will happen in April, he insisted, when the company has to formally declare its plans along with its full list of investors and other details. When those changes happen, the unions at the old Olivetti factories will need to be consulted, he added.
"The process of informing and getting the unions in the boat is underway. There are some legal processes and we'll inform the unions in detail abou the new plan," Auer said.
The job cuts are unlikely to affect sales and marketing staff and will result from rationalisation of back office functions, he added.
The turbulence caused at the end of last year by the protracted sell-off process had affected the PC division's profitability, Auer admitted. "The turmoil of the event that happened on 3 September last year (the decision to sell) was not helpful at all. We had a significant wait and see attitude from large banks and some large customers said wait and see too. Our channel partners kept up with volumes we'd agreed to. There was a revenue and profit impact but I can't give you any figures until April."
The old Olivetti Group will retain a 12 per cent share in the Piedmont company, Auer confirmed.
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