Deutsche Telekom to cut staff

Deutsche Telekom to cut staff

Mobile phone service provider Deutsche Telekom has announced plans to shed one fifth of its German workforce. This comes to around job cuts of nearly 32,000 workers in the coming three years. The reason behind these plans is the loss Deutsche Telekom made in their German fixed- line division. The company is losing its edge in the market in the last few years as cheaper alternatives are coming up fast in Germany.

The VoIP technology is making the situation worse as consumers are using internet to make international calls killing one of the major revenue sources for the company. About their layoff plans, Deutsche Telekom said that they expect to spend 3.3 billion euros (3.95 billion dollars) on severance compensation and would not exercise its legal options to sack staff outright.

They currently employ around 170,000 workers in Germany, which includes around 46,600 persons with civil-service status that are difficult to dismiss. Internationally, they have around 250,000 people working for them. They also said that new hiring would still be done in different areas and around 6,000 jobs would be created.

This is not the first time that Deutsche Telekom would be cutting staff to control losses. Over the last decade, they have shed 100,000 staff as call prices in Germany plunged and automation made technicians redundant.