Dialog-controlled Suntel has offered a Voluntary Retirement Scheme (VRS) to its 730 staff as part of a strategy to re-organize the company, according to a January 20th note circulated among staff by the Managing Director (MD) of the company, Jeremy Huxtable.
Informed sources said the company wants to downsize by about 500 while around 250 workers have so far responded to the offer. The reduction in staff numbers followed the acquisition of Suntel Ltd, the second largest wireless fixed line operator in Sri Lanka, by Dialog Axiata's subsidiary, Dialog Broadband Private Ltd recently.
The Dialog announcement at the time said a VRS would be introduced in preparation for the merger, between the two entities. When contacted by Business Times, Mr Huxtable declined to comment on the VRS or any other issue. Employees who accept the VRS and whose application is accepted will be paid gratuity in terms of the law, the staff notice said. Those employees having less than five years completed service but three or more years of service will be paid an additional payment of half month's salary for each completed years of service.
The company has obtained an exemption of tax from the Department of Inland Revenue up to Rs. 2 million of the compensation paid to each staff member under the VRS. For any sum exceeding Rs. 2 million paid to employees a 10% tax will be retained by the company, the staff notice said.
The acquisition is expected to give Dialog a marginal growth in net profits and an annualised cost saving of Rs. 600 million.