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China Telecom Plans to Discharge 200,000 Staff
At least 200,000 employees of China Telecom face losing their jobs in the next five years as the country's largest fixed-line operator moves to reduce its operating costs, according to Chinadaily.
The plan will involve the biggest ever series of layoffs in the profitable telecom sector.
However, only 11 of the company's 31 branches are profitable, said Zhou Deqiang, president of China Telecom.
Market analysts said that it is necessary for China Telecom to slim its workforce. The newly created firm took in most of the redundant employees from the former monopoly China Telecom, which operated mobile communications, paging services and satellite communications.
The move aims to slash operation costs and promote service efficiency. China Telecom has a large employee pool of 530,000.
The employment downsizing is one of the key reforms initiated by the new China Telecom, which was inaugurated in May this year after a central government-orchestrated split of the telecom monopoly into four independent companies.
Experts said such a large programme of layoffs would pose greater pressures for China Telecom and would be difficult for the company to initiate. The telecom sector is widely regarded as one of the most popular places to find a job.
China Telecom's bold decision has fully demonstrated the company's confidence to rebuild its image and become profitable as soon as possible.
Unskilled workers will be the first to lose jobs. In another effort to increase the company's business revenues, China Telecom recently announced its proposal to raise the local phone price from the current 0.18 yuan (US$0.02) per three minutes to 1.0 yuan per minute (US$0.12).
This means the local phone charge will increase by more than 66 per cent from the current level.
"The proposed local phone adjustment is based on the practical costs, and it also complies with the international level," Zhou explained.
The announcement, however, has stimulated a round of criticism from consumers and social experts.
At present, China's telecom operators still overcharge the installation fee for fixed lines and network access fee for mobile phone communications.
China Telecom's official said that the installation fee, which is currently around 1,500 yuan (US$180) per new phone, will be gradually abolished. But the price counting method cannot be changed from per minute to per second.
China Telecom's proposal of a price increase awaits a hearing by the State Planning Development Commission.
Insiders revealed the company's next major target is to gain a licence for mobile communication services from the Government.
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