Deutsche Telekom AG, Europe's largest telecommunications companies, said Wednesday that it plans to eliminate 19,000 jobs in Germany over three years, or 9 percent of its total work force, as it streamlines operations. The Bonn-based company said the cuts would include voluntary buyouts, layoffs and outsourcing of some jobs. It said the process would cost a total Ђ3.3 billion (US$3.9 billion).
Deutsche Telekom said the worldwide realignment of the telecom industry, along with the rapid pace of new technologies and tough competition in the fixed network and broadband sectors in Germany, led to the decision.
"On the one hand, jobs must be cut in old core markets; on the other, there are opportunities to create jobs in new innovative markets," the company said.
The shakeup will see Deutsche Telekom create 6,000 new jobs.
Under the plan, a total of 32,000 workers will leave the company in Germany, with 7,000 of those being outsourced on a permanent basis to a subsidiary, Vivento.
Vivento was created in 2002 as a temporary unit so that Deutsche Telekom could transfer several thousand employees to it and avoid having to lay them off.
Some 25,000 jobs will be cut through 2008, but that will be partially offset by the new jobs, making a total reduction of 19,000. Deutsche Telekom currently has a total work force of nearly 245,000.
Deutsche Telekom said it would provide severance payments where needed, the AP reports.
Under the terms of Deutsche Telekom's collective bargaining agreement with its unions, no cuts can be made without the approval of the labor groups. The company said it has already started discussions with them.