Deutsche Telekom AG’s plans to cut 32,000 jobs over the next three years have hit a fresh delay after the carrier failed to reach an agreement with its services union, Ver.di.
Despite reports that the two had reached an agreement on Thursday, Ver.di later dismissed the deal saying the offer was not adequate. Talks are said to be ongoing.
In December, Deutsche Telekom, Europe’s largest fixed-line carrier, faced a wave of protest as workers took to the streets to protest at the cuts. Nearly 5,000 workers gathered in the German cities of Bonn and Berlin, ahead of the meeting of the carrier’s supervisory board to approve the cuts before Christmas. Approximately 4,000 protesters were also said to have demonstrated outside the Telekom building in Bonn.
The restructuring, which will involve no compulsory job losses, will cost 3.3bn euros ($4bn) and is modest given that the workforce at Europe’s biggest carrier is 244,000. The biggest reductions will be at T-Com, which runs the fixed-line network, where 20,000 of the 47,000 jobs are to go. A further 5,500 jobs are to go at T-Systems, and 7,000 employees will be moved on a permanent basis to private company Vivento, which operates a large call-center operation. The company also plans to cut 1,500 jobs in the group’s centralized functions.
It has been estimated that Deutsche Telekom has axed an average 10,000 jobs each year over the past 10 years in an effort to slim down and cut costs. However, job cuts are a sensitive issue in Germany where unemployment is running at 11.6%, and the country has nearly 5 million unemployed.
Deutsche Telekom is just one of a number of German companies to have held back job-cut plans until after the completion of the German election late last year. DaimlerChrysler announced plans to cut 8,500 jobs at its Mercedes unit, while Volkswagen said it has several thousand too many staff, and engineering giant Siemens has plans to cut 2,400 jobs at its loss-making units.