Telecom Italia confirmed plans to cut about 1,700 jobs and delay a scheme that would have seen the Italian operator hire up to 4,000 young people under a government proposal.
"As of today, the staffing issues remain and, in some divisions, also the issues of labour costs," the company said in a statement.
The group workforce stood at almost 66,000 people at the end of the first quarter. The company, which is seeking to reduce its overall labour costs, said it told unions of its decision at a meeting in Rome on Thursday with officials from the Ministry of Economic Development.
At the same time, Telecom Italia signalled it is willing to hold further talks with unions in order to find solutions that would safeguard employment while maintaining sustainable labour costs. It said the parties involved have agreed to carry on negotiations at the Ministry over the next days, with a further update expected on July 29.
Reuters noted that the plan to cut jobs has angered unions. There is also opposition to the proposed move of around 10,000 customer service employees to a newly created unit called Telecom Caring.
"Until we see eliminated from the dispute the issue of the corporate reorganisation of Telecom customer service, [the union] SLC CGIL will not open any negotiations with the company," Massimo Cestaro, secretary general of SLC CGIL, said in a statement.
Meanwhile Telecom Italia also said it had postponed plans for now to recruit 4,000 young people as part of a proposal by the government to reform the labour market. The company said it is still willing to implement the project but is waiting for the government to complete the scheme.
The job cuts and recruitment freeze only serve to illustrate the ongoing financial pressure on the group. Although in March it reported an annual profit for the first time in three years, its debt remains a heavy burden. At the end of 2014, the net financial debt stood at €26.6 billion ($29 billion).
Telecom Italia is also planning to spend a total of €14.5 billion on network investments in Italy and Brazil from 2015-2017. It recently rebranded its fixed, mobile and Internet consumer services under the TIM brand.
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