Deutsche Telekom CEO threatens sale of service units

Deutsche Telekom's CEO appealed for union agreement to plans to cut pay and increase hours for service workers, and said in an interview that the company may have to sell service units if there is no deal, according to an Associated Press report.

The Associated Press report said the plans have prompted the first major strike against Europe's biggest telecommunications company since it was privatized more than a decade ago.

The report said some 10,000 employees walked off the job last week after members of the service workers' union, ver.di, voted overwhelmingly to strike.

'We have no alternative to the reform course,' CEO Rene Obermann was quoted as saying. 'But if there is no solution with the union, we could be forced into sales of service operations to get costs under control; that would certainly be the worse solution for employees, and we don't want it.'

The Associated Press report further said Deutsche Telekom wants to transfer up to 50,000 staffers to a new service unit, dubbed T-Service, in a move that would allow the Bonn-based company to amend the employees' labor contracts to secure more hours and lower pay.

The company says it needs to transfer the workers as part of a cost-cutting plan to remain competitive, the report further said.

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