Eircom staff from the Communications Workers’ Union have accepted a cost reduction programme aimed at saving the company €92m over the next three years.

The company, which is carrying debts of €3.8bn, has warned that it is in danger of breaching its debt covenants.

The package includes a 10% pay cut arising from a reduced hours formula whereby staff will only work nine days per fortnight.

Further cost saving measures will be negotiated over the next three months.

Of the union's 4,000 members, 1,908 voted in favour of the cost cuts, with 1,388 voting against.

The ballot result clears the way for the main shareholders in the company, STT and the Eircom Employee Share Ownership Trust, to address its debt issues.

CWU General Secretary Steve Fitzpatrick said he was relieved rather than happy at the result given the hardship that the package will place on his members.

He said he hoped to see the necessary investment being put in by the shareholders as promised.

He also hoped they would now see an end to the asset stripping of Eircom as a company by venture capital groups.

Eircom welcomed the result, and said it would now move to formalise the agreement.

'It is extremely encouraging to know that our employees throughout the organisation are prepared to make difficult but necessary decisions to help secure the long term financial future of the company,' said Paul Donovan, CEO of the Eircom Group in a statement.

Main shareholder silent on investement plans

Singapore Technologies Telemedia has declined to confirm whether it will proceed to invest in the company following the staff's acceptance of the cost-reduction programme.

In a statement, STT said it understood that Eircom management was still exploring various options on the balance sheet remediation, including preliminary engagement with lenders.

They said that it was therefore inappropriate for them to comment at this point.