Deutsche Telekom seeks to speed up cost-cutting efforts

Germany's Deutsche Telekom wants to step up its efforts to cut labor costs and boost competitiveness by redeploying a large number of its civil servants and slimming down its bloated administration, a Reuters report said.

The Reuters report quoted Thomas Sattelberger, who steered Deutsche Telekom through tough negotiations with labor last year, as saying that personnel accounted for 27.8% of costs compared with 21.5% at French telecoms group France Telecom .

Deutsche Telekom has around 250,000 employees worldwide, France Telecom has some 200,000.

In Germany, Deutsche Telekom has a staff of 150,000, of which some 60,000 are civil servants.

The Bonn-based company aims to save up to 4.7 billion euros ($6.8 billion) in costs by 2010, including 2 billion euros ($2.9 billion) last year, a large part of which is to come from reduced labor costs, the Reuters report added.

Last year, Sattelberger negotiated a deal with labor after a stand-off with unions, allowing Deutsche Telekom to cut costs by moving 50,000 staff into new lower-paying service units, the report said.

The company also implemented a program in 2006 to cut 32,000 jobs by end-2008 through voluntary redundancies which will also contribute to savings, the report said. Sattelberger said the company will meet that target but will not set up another program.

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