Dutch phone firm KPN plans to cut about 8,000 jobs in the next five years and sees a big drop in core profit this year.
The company reported 2004 profit of €1.78 billion before taxes and book gains as operating revenue fell 6 per cent to €12.1 billion. It made a pre-tax profit of €1.55 billion a year earlier.
KPN said the cuts of between 1,500 and 1,750 jobs annually through 2009 - mainly at its shrinking fixed-line unit - would help it save €850 million a year from 2010, with a step by step decrease in costs of €150 million to €200 million in each year until then.
Its shares fell 3 per cent to €7.09 early this morning, underperforming the DJ Stoxx European telecom sector index, which was almost flat.
KPN, which has already been one of the most aggressive cost cutters among European phone companies, said it planned to raise its 2004 dividend to 35 cents.
The group forecast a high-single digit percentage drop in 2005 earnings before interest, taxes, depreciation and amortisation (EBITDA), with the biggest decline in the first quarter.
The figure does not include restructuring costs. KPN blamed the expected core profit slide on the declining traditional fixed-line business and planned investments in new technologies such as third-generation mobile and Internet-based services.