EIRCOM STAFF have voted in favour of a recovery package that is designed to achieve labour savings of €92 million.

The plan will involve pay cuts of 10 per cent, reduced working hours and more than 1,000 job cuts.

Members of the Communications Workers Union voted in favour of the package by 1,908 votes to 1,388. There were two spoilt votes.

While members of the CPSU union are believed to have rejected the proposal, there are sufficient votes in favour from other unions to carry the aggregated ballot.

Eircom welcomed the result and said it would “move to formalise the agreement, implement reductions in working time for a pro-rata reduction in pay, and will commence discussions on modernisation proposals . . . as soon as possible”.

Eircom chief executive Paul Donovan said it had “taken another important step on the path towards a competitive cost structure”.

“It is extremely encouraging to know that our employees throughout the organisation are prepared to make difficult but necessary decisions to help secure the long term financial future of the company,” he added.

Commenting on the outcome of the ballot, general secretary of the Communications Workers Union Steve Fitzpatrick said: “Workers at Eircom have yet again demonstrated their commitment to securing a sustainable future for the company by agreeing a very difficult package of measures.

Mr Fitzpatrick told The Irish Timesthat Eircom would now have to resolve issues surrounding its financial position.

“We expect management and shareholders to honour their side of the bargain and come up with the badly needed investment for the business,” he said.

Eircom has net debt of €3.8 billion and has signalled that it could breach its covenants by the end of August.

One of the solutions open to the company is a so-called “equity cure” by its shareholders – Singapore-based STT and the employee Esot.

An injection of cash is allowed every 12 months as part of the agreement with lenders.

It is understood that an equity injection of €40-50 million could resolve its immediate covenant issues.

In the six months to the end of December, Eircom’s revenues declined by 6 per cent and it shed customers in both its fixed-line and mobile divisions.

Eircom has already cut its workforce by 1,791 since March 2009. It had 7,170 workers at the end of December 2010.

Mr Fitzpatrick said that the Communications Workers Union and its sister unions would begin talks with Eircom management within the next week on the implementation of the plan.