Pertamina will gradually cut workers by 7,775 in five years

Pertamina will gradually reduce the number of its employees by 7,775 in five years in a bid to improve the efficiency of the state owned oil and gas company.

Wawan Irawan, the head of the company's human resource development, said in Yogyakarta on Friday that the number of the employees which reached 25,525 people at present would be gradually cut to reach an ideal level of 17,800 in 2005.

"In the next five years, the number of the employees should be gradually cut by 7,775 people in order to reached the ideal level," he told journalists in a workshop.

According to him, the company would avoid a massive lay-off in reducing the number of its workers and would instead offer an early pension program. "Only with the cut in the number of the employees, the company will be able to compete with foreign companies during the free competition era in 2010," he added.

Besides due to the large number of its labor force, the inefficiency in the company was also resulted from the social mission carried by the company such as subsidizing the fuel sales, he said.

Wawan said that the existing regulation, which requires the company to pay higher amount of tax payment also impeded Pertamina's operation. " A private company is required to pay 30 percent income tax, much lower than the 60 percent tax payment imposed on Pertamina," he added. (*)