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Press release

Price erosion leads to job cuts

31 March 2000

Swisscom is to take targeted measures to ensure the long-term success of the com-pany. These measures will principally be geared to increasing efficiency and reducing costs. Increasingly fierce competition is leading to substantial price erosion in the telecoms markets. A further 3,000 jobs will be shed in the Swiss core business between 2001 and 2003.

Rapid technological and structural changes in telecommunications have far-reaching consequences for the Swiss domestic market. Following price reductions for fixed-network telephony of up to 70% in March 2000, cost pressure has continued to mount at Swisscom. Swisscom CEO Jens Alder commented: "Prices are set to continue to fall in key areas of our business and we must further reduce costs through targeted measures - job cuts are therefore unavoidable". According to Jens Alder´s estimations around 3,000 jobs will be shed between 2001 and 2003. At the end of 1999 the Swisscom group employed 21,777 staff (incl. debitel). The terms of the job cuts will be negotiated with the social partners.

Efficiency increases and structural changes

As a further measure, Swisscom has initiated a programme to increase efficiency and improve customer orientation. This programme incorporates further cost reduction measures and a sustained focus on core competencies which will result in the outsourcing of further jobs. The programme also involves internal structural change where the emphasis is placed on ensuring quality of service through simplification of complexities. On 1 April 2000, Mobile and PubliCom (fixed-network telephony) will be merged under the management of Executive Board member Carsten Schloter. The new unit also incorporates Payphone Services and Operator Services. Business Com will be integrated into the Marketing&Sales division that will be managed by Heinz Karrer. A new e-business unit is to be set up to establish and extend e-commerce with Blue Window and Swisscom Directories, a key area of business for the future. This will be managed on an interim basis by CEO Jens Alder.

Berne, 31 March 2000


Swisscom AG
Media Relations
3050 Bern