Cost Savings

May 15, 2009 (LBO) - Sri Lanka's Dialog Telekom said it expects to make an annual cost saving of 500 million rupees by shedding staff through a voluntary retirement scheme in an effort to stem losses. Nushad Perera, Dialog’s Chief Marketing Officer, told ETV’s Lanka Business Report programme in a recent interview that the VRS was completed on April 24 with 280 of the firm's 4,000 employees opting to quit.

The VRS had been offered to executive and higher grades. The firm, a unit of Telekom Malaysia, said in a statement it had provided for 256 million rupees to implement the company’s Voluntary Resignation Scheme (VRS) in the March 2009 quarter.

"The VRS is expected to deliver an annualized cost saving of 500 million rupees following its implementation during the second quarter of the year," said the company statement, which accompanied the quarterly results.

Dialog Telekom lost 1.86 billion rupees in the March 2009 quarter against a profit of 888 million rupees a year ago, though losses were less than in the December quarter.

The statement said the improvement in performance was driven by a three percent reduction in direct costs and 12 percent reduction in operating costs.