Lotto Sport Italia has come to an agreement with its employees and their union representatives on a cut in its personnel costs that would be equivalent to about 60 full-time positions, indicating that its non-consolidated sales fell by about 18 percent in 2009. Major declines were recorded in particular in southern Europe, especially in France, and in Eastern Europe with the exception of markets in which the brand is very strong, such as Romania. Flat sales are expected for this year.

Lotto currently employs about 280 persons in Italy, about 40 more than four years ago, as its sales had been growing more or less steadily for several years. The labor cuts will be achieved in part through a “solidarity scheme” whereby most of the lower-level employees will work between four and six hours less each week for 12 months. Some 30 employees will stay at home for about one year and their wages will be largely subsidized by the state. A few others will go into retirement earlier than expected.

The package has reportedly been praised by the unions for its fairness and the transparency adopted on the issue by the management, which has instituted other cost reduction measures in all the domains. Marketing expenses have been pared down in line with the sales decline, trying to maximize they effectiveness.

Observers pointed to important personnel cuts already implemented in the Montebelluna region by other companies such as Diadora, Fila, Tecnica Group, Salomon, Rossignol and The North Face. Not far away, near Vicenza, Dainese announced more drastic measures at the same time as Lotto (see next article).