The new French owners of Eir are set to move the group's corporate headquarters from the Heuston South Quarter to the out-of-town Citywest Business Campus in a bid to cut its rent bill by more than €10 million a year.
The decision is the latest in a series of cost-cutting initiatives being pursued at Eir since two companies controlled by French billionaire Xavier Niel acquired a controlling interest in the company in April in a deal that valued the business at €3.5 billion, including debt.
Eir rents two buildings in Citywest, which is located almost 17km southwest of Dublin’s city centre.
The move comes three months after Eir unveiled plans to cut 750 jobs, targeting all grades of staff from workers in stores to managers, though about 1,100 of mainly field workers have not been allowed to participate in the voluntary severance scheme as the company continues to invest in its network. Eir had already axed more than 2,200 jobs in the past five years, leaving 3,325 staff at the time of the takeover.
Other cost-cutting efforts have seen Eir, which spent about €9 million on advertising last year, decide to stop using media-buying firms to plan and buy all of its advertising and move the work in-house.
Property rejig
The property rejig, meanwhile, is taking place a decade after the company – then called Eircom – moved its head office from St Stephen's Green to its current location near Heuston Station railway.
The telecoms group sold the property to Quinlan Private in a sale-and-leaseback deal before making the initial move. US investment firm Northwood acquired the asset following the property crash before selling it on in March for €176 million to a unit of CK Hutchison Holdings, which owns mobile phone company Three.
The Irish Times reported earlier this week that Eir is in advanced talks to sublet one of its blocks at Heuston South Quarter, comprising 5,202sq m (56,000sq ft) of space, to AIB. The early success of the letting campaign for the property has prompted the company to seek replacement tenants for the adjoining eight-storey block, which extends to 14,846sq m (159,801sq ft).
Carolan Lennon, previously head of the company’s networks and wholesale division, was installed as the new group chief executive as the French deal went through, replacing Richard Moat, who signalled at the time of the takeover announcement that he was leaving Eir.
Mr Neil’s investment vehicle NJJ and Paris-listed telecoms company Iliad, in which the entrepreneur owns a 52 per cent stake, acquired 64.5 per cent of Eir in the April deal. Previous Eir shareholders US hedge funds Anchorage Capital and Davidson Kempner Capital also remained on board as part of the transaction.
