Deutsche Telekom cuts 90 per cent of admin staff

NEWS Deutsche Telekom is planning to lay-off 90 per cent of its administrative staff, according to reports from German news sources. In a drive to further reduce its 188,000 strong workforce, Europe's largest telco will cut around 6,000 of its 6,500 administration positions. Telekom chairman Ron Sommer is reported to have told workers in Bonn that the move will prepare the company for increased competition in the German market, which was only liberalised at the beginning of the year. However, analysts and unions are reserving judgement until the company makes a statement tomorrow, at a half-yearly press conference. John Moroney, principal consultant at Ovum, commented: "I can't see it happening. How are they going to cut that many jobs, especially with Germany having such strong unions?" The DPG German telecommunications workers union was not immediately available for comment, but it is thought the administrative positions are protected by agreements lasting until 1999 or 2000. The cuts are also being seen as an attempt by Telekom to reign in what has traditionally been a decentralised system of administration. However, there are those who believe redundancies should not be the telco's priority. Moroney added: "To become more efficient, Deutsche Telekom needs to move to a digital network and improve customer service. The company hasn't woken up to competition yet, and this their immediate reaction to it."