05-10-2016

AlmavivA Contact: new reorganization plan

Rome, 5 October 2016 – Following up on the Agreement signed on 31 May last, and as a result of the further drastic deterioration of its financial performance and operating results – consistently with the indications highlighted by the monthly monitoring board meetings – AlmavivA Contact announced today its decision to initiate a staff axing program, as part of a new corporate reorganization plan.

The decision has been notified to the Trade Unions and the Labor Ministry. The previous Understanding with the Unions and competent government institutions, besides providing for a 6-month solidarity contract, outlined stringent actions for enabling AlmavivA Contact to recover its competitive capacity and establish a renewed business balance, supported by the announced structural reform measures in the call center sector, based on the shared conviction that only effective changes to the market framework and rules could enable an alternative path to restructuring.

However, the outcome of the monthly monitoring of the Agreement implementation, as requested by the Company, and reflecting the situation at 22 September, has resulted in the Trade Unions refusing to sign the specific agreement on the management of quality and individual productivity, one of the core commitments of the agreement, and which had been acknowledged as binding, which unexplainably removes a fundamental lever for qualifying our offering and gradually reabsorbing the redundant personnel.

At the same time, we have registered a constantly deteriorating market scenario – at least ten companies in the industry having closed down over the last few months – which continues to be affected by unchanged distorting factors, while the declared reorganization activities have had absolutely no impact. Proof of this lies in the fact that, despite some very clear laws, which are unenforced, to date, there has been an uncontrolled rise in the number of operations relocated abroad, in non-EU member countries: based on the official data provided by the Albanian Central Statistics Office, the number of call centers operating for the Italian market in that country practically doubled, with over 25,000 new jobs created.

Furthermore, there is an ongoing trend of local authorities issuing procurement notices or awarding contracts at prices that are entirely incompatible with the cost of labor, such as the infoline and 060606 services of the local authorities of Milan and Rome, and the recent Recup service of the regional government of Lazio, which featured a base bid price below the minimum wage set out in any national employment agreement.

Given these conditions, however hard we try to honor our commitments, the financial performance of AlmavivA Contact can only worsen, which obliges us to intervene to keep the company afloat and protect jobs.

Over the last four years, during which we have preferred not to axe jobs, our revenues have dropped by 50%, often to the advantage of operations relocated to non-EU countries, with a further significant acceleration in the last few months.

The new reorganization plan, which aims at containing costs, streamlining the production process, enhancing logistical efficiency and exploiting our proprietary technologies, provides for the closing down of facilities in Rome and Naples, and cutting 2,511 jobs (1,666 in Rome and 845 in Naples). These two production sites, despite the social shock absorbers put into place, have recorded average losses of 1.2 million euros on revenues of 2.3 million euros per month, in the period following the Agreement of 31 May (June – September 2016).

The plan concerns 5% of the Group’s global workforce.

Over the next seventy-five days, in accordance with the applicable regulations, the Company will start negotiations with the Trade Unions to examine the social and employment impact of the process.