Indosat, one of Indonesia’s major telecommunications providers, has laid off its employees as part of a change in business strategy to bring the company closer to market needs.
Indosat director and chief human resources officer, Irsyad Sahroni said that 677 employees were laid off on Friday, February 14, 2020 and that more than 80 percent of the affected employees had received a fair (severance) package above the statutory requirements.
Irsyad said the job cuts would improve the company’s performance. They would also help Indosat remain competitive amid serious disruption and optimise its services to provide a better customer experience.
“We have thoroughly reviewed all possible options and have reached the conclusion that we must take this tough but necessary action to be sustainable and grow… We are taking a fair approach aligned with prevailing laws and regulations, communicating directly and transparently with both impacted and unimpacted employees,” he stated.
Meanwhile, Indosat worker’s union head of public relations and media Ismu Hasym told the Jakarta Post that most of the laid-off employees were from the network operations division.
“About 200 employees who were laid off came from network operation division because the company said it would outsource to other companies,” Hasym said, adding that he suspected such a strategy was taken following the sales of its telecommunication towers last year.
Indosat is majority-owned by Qatar-based Ooredoo. GSMA Intelligence data revealed that it is the second-largest operator in the country, with a 17-5 percent market share by subscribers at end-December placing it marginally ahead of rival XL Axiata, with a 16 percent share.
However, throughout the first nine months of 2019, the company also recorded IDR1,29 trillion in employee cost, down 23.35 percent year-on-year. The employee cost accounted for 7.42 percent of the company’s total expenditure during that period. In October 2019, the operator arranged a sale of 3,100 towers in a deal valued IDR6,39 trillion, in a bid to lower its debt.