Telekom reportedly mulling massive job cuts
Published on: 01 Aug 2011 10:19 CET
Many of the cuts will be made at the senior management level, business daily the Handelsblatt reported Monday.
The cuts are part of a larger austerity programme that will run until 2015 and is aimed at cutting expenses at its headquarters, which has been accused of being overloaded with high-paid management.
A spokesman confirmed to Handelsblatt that cost-saving measures were coming, but would not elaborate on what was planned.
With aggressive cost-cutting between 2007 and 2010, the company says it has already saved about €8 billion – though mostly from synergies rather than job losses.
Initially, the savings at its Bonn headquarters will likely be wiped out by massive severance packages, which could average between €200,000 and €250,000 per person, totalling up to €400 million in the short-term. But the move will eventually save the company hundreds of millions of euros.
Deutsche Telekom has been hit by a series of crises in recent months, including accusations of corruption and technical problems with a toll road scheme that may end up costing it up to €1 billion.
More recently, there have been threats of strikes by company employees.