Telekom Accelerates Job-Cut Plan
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BERLIN (AP) _ Deutsche Telekom, Europe’s biggest phone company, said Wednesday it is accelerating a program to cut nearly 30,000 jobs, or 11 percent of its work force, in hopes of reviving earnings.
The number of employees at Telekom’s main T-Com German fixed-line business will fall by 7,200 this year. Another 14,000 are to go in 2003. An additional 8,300 jobs will be cut by 2005.
The Bonn-based company previously had planned no more than 10,000 reductions a year under the cost-cutting drive, Telekom spokesman Stephan Broszio said.
The former German state phone monopoly is looking to improve earnings hurt by a costly push into mobile phones that sent its share price lower. The company’s then-chief executive, Ron Sommer, resigned in July under pressure from shareholders, including the German government. Sommer’s replacement, interim CEO Helmut Sihler, has pledged to expedite efforts at a turnaround.
The company lost a record $3.8 billion in the first half of this year, despite a pretax profit of $1.57 billion at T-Com, and has pledged to sell non-essential assets to reduce debts totaling $63 billion.
Telekom employed 257,000 people worldwide at the end of last year, including 118,000 at T-Com.
Shares in the company traded 1.3 percent higher at $8.94 on the Frankfurt stock exchange after the announcement.