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Note 28 – Employee benefits expenses
Employee benefits expenses amount to 3,917 million euros, decreasing 104 million euros and consist
of the following:
(millions of euros) 2011 2010
Payroll expenses
Wages and salaries 2,788 2,615
Social security expenses 993 931
Employee severance indemnities (75) 40
Other employee benefits 119 112
(a) 3,825 3,698
Costs and provisions for temp work (b) 5 9
Miscellaneous expenses for personnel and for other labor-related services rendered
Remuneration of personnel other than employees 9 8
Charges for termination benefit incentives 64 56
Expenses for mobility under Law 223/91 12 258
Other 2 (8)
(c) 87 314
Total (a+b+c) 3,917 4,021
The decrease in employee benefits expenses is mainly due to:
• the increase connected with the consolidation of the Argentina Business Unit for the full year 2011
(+11,521 average headcount compared to 2010) with an effect of 364 million euros;
• lower expenses owing to the contraction of the average headcount of the salaried workforce (the
above effect relating to the Argentina Business Unit is already excluded) by 3,301 compared to
2010, of whom an average of 1,188 persons are under so-called “solidarity contracts” in
Telecom Italia S.p.A. and Shared Service Center;
• the reduction in the cost connected with the provision for employee severance indemnities, for
113 million euros, relating to the actuarial effects of the employee severance indemnities arising
from the change in the economic parameters of reference (discount rate and inflation rate) and the
new law on pensions (Law 214 of December 22, 2011) which extends the period in which a person
works;
• it should be recalled that in 2010 accruals had been recorded for 258 million euros for mobility
under Law 223/91, following agreements reached with the labor unions by the Parent,
Telecom Italia S.p.A., by TI Sparkle, by SSC, by Olivetti S.p.A. and by Olivetti I-Jet. In 2011, provision
charges were recorded for a further 12 million euros, of which 9 million euros refers to the Parent,
Telecom Italia, and 3 million euros to SSC.
The average headcount of the salaried workforce, including those with temp work contracts and
excluding employees of Discontinued operations/Non-current assets held for sale, is 78,369 in 2011
(70,150 in 2010). A breakdown by category is as follows:
(headcount) 2011 2010
Executives 1,303 1,172
Middle Management 6,418 5,316
White collars 70,457 63,410
Blue collars 104 168
Employees on payroll 78,282 70,066
Employees with temp work contracts 87 84
Total average headcount of salaried workforce 78,369 70,150
Headcount in service at December 31, 2011, including those with temp work contracts, is 84,154
(84,200 at December 31, 2010) with a net decrease of 46.
Telecom Italia Group
Consolidated Financial Statements
Note 28 – Employee benefits expenses 254