D. Telekom 'to axe 30,000 jobs'
FRANKFURT, Germany -- Deutsche Telekom, Europe's biggest phone company by sales, is planning to shed 30,000 jobs, according to a press report.
The number is far more than had been originally anticipated, the Financial Times Deutschland said, reporting that the move was in response to flagging share prices and a drive to push up profits.
About 20,000 jobs are to go at its fixed-line T-Com business, which currently employs 120,000 people, as sales come under pressure. The rest would be shed at other units including mobile phone operator T-Mobile and T-Systems.
"Telekom is planning to shed jobs to a far greater extent than was planned," a spokesman for the Verdi union was quoted as saying.
The debt-laden telecom giant, which posted a net loss of 3.45 billion euros ($3.1 billion) in 2001, has said revenue growth in its mobile phone operations would help return the group to profitability.
But Deutsche Telekom, like rival France Telecom, is under pressure from investors to slash its 67.2 billion euro ($54.43 billion) debt load, which has built up from costs associated with the billions spent on high-speed (3G) mobile phone licenses and acquisitions.
Germany's dominant phone company spent more than $15 billion on mobile phone licences and bought loss-making U.S. wireless operator VoiceStream for $24 billion.
As part of its debt-reduction strategy, the group plans to float T-Mobile. However, the initial public offering has been delayed indefinitely due to weak market conditions.
The flotation, which is expected to raise 10 billion ($8.69 billion), has been key to helping the German telecom giant meet its commitment to cut its debt to 50 billion euros by the end of 2003.
Deutsche Telekom's debt reduction plan also includes the sale of its cable television assets.
The company had been expected to cut about 10,000 jobs from its global workforce of 265,000.
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