Deutsche Telekom ends labor dispute

Deutsche Telekom's CEO voiced relief over the end of a long dispute over plans to cut wages and extend hours for service workers, an Associated Press report said.

The Associated Press report also quoted CEO Rene Obermann as saying that his company is sticking to its profit target for this year.

Following nearly six weeks of strikes, negotiators for the ver.di union accepted a week ago longer hours and a gradual 6.5% pay cut for some 50,000 service workers, in exchange for protection from layoffs through 2012, the report said.

Ver.di said that 72.6% of members voted in a ballot to accept the deal, putting a formal end to the dispute, the report said.

The Associated Press report also said Obermann dismissed suggestions that the company could miss its full-year pretax profit target of some 19 billion euros ($25.6 billion), about the same as 2006.

'I don't share this fear,' he was quoted as saying. 'The roughly 19 billion are an ambitious but feasible target.'

The dispute centered on a plan by Deutsche Telekom to transfer some 50,000 jobs into its new T-Services unit, part of Obermann's plan to redefine its fixed-line service and make it more cost-effective, the report said.

Telekom originally said it wanted to trim wages by 12% and proposed forgoing any layoffs through 2011, it said.

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