Privatisation of TeleDanmark creates fear of mass redundancies
Published: 27 September 1997
In a statement on the 1998 Budget, the Danish Government has confirmed that it intends to sell off its stocks in the former state owned telecom operator - TeleDanmark. The Government plans to dispose of its shares in the enterprise for a total of DKK 25 billion, and TeleDanmark will purchase stocks to the value of DKK 14 billion. The remaining shares will be traded on the open market. The sale of the state-owned stock will produce enough revenue to ensure a surplus in government finances for 1998. However, the Minister of Finance,Mogens Lykketoft, has emphasised that the sale is not designed to raise revenue but rather to ensure the liberalisation of the telecommunications sector.
The forthcoming sale of the 51% state-owned share in TeleDanmark, confirmed by the Danish Government in September 1997, has sparked renewed fears of further redundancies.
In a statement on the 1998 Budget, the Danish Government has confirmed that it intends to sell off its stocks in the former state owned telecom operator - TeleDanmark. The Government plans to dispose of its shares in the enterprise for a total of DKK 25 billion, and TeleDanmark will purchase stocks to the value of DKK 14 billion. The remaining shares will be traded on the open market. The sale of the state-owned stock will produce enough revenue to ensure a surplus in government finances for 1998. However, the Minister of Finance,Mogens Lykketoft, has emphasised that the sale is not designed to raise revenue but rather to ensure the liberalisation of the telecommunications sector.
The planned sale has once more given rise to conflict between the management and employees of TeleDanmark. In January 1997, TeleDanmark planned to have 2,000 fewer employees on its payroll by mid-1998 - making 2,500 existing employees redundant, and recruiting 500 new employees with particular skills. This plan provoked fierce opposition from employees and their trade union, the Danish Union of Telecommunication Workers (TKF). After a wave of unrest, TeleDanmark agreed to cooperate with TKF on how to deal with the redundancies issue (DK9702101F).
In May 1997, TeleDanmark and TKF reached an agreement which provided for early retirement arrangements for those employees aged over 55. It was also agreed to commence a retraining programme for around 4,000 existing employees. In early September 1997, some 1,600 employees had agreed to take early retirement.
The decision by the Government to privatise TeleDanmark has been welcomed by its management. The employees, however, now realise that this is their last opportunity to exercise some influence on future developments in the company. They are determined to ensure that any future redundancies are only carried out by means of early retirement arrangements, natural wastage or by voluntary methods. They know, however, that the increasing pressure of a liberalised telecom market may well involve many more redundancies in the future.
Eurofound recommends citing this publication in the following way.
Eurofound (1997), Privatisation of TeleDanmark creates fear of mass redundancies, article.
