Deutsche Telekom to axe 32,000 jobs
Deutsche Telekom is axing 32,000 jobs in a radical restructuring as the German phone group ruled out making a counter-bid for O2, leaving Telefonica with a clear run at the British mobile phone firm.
The job losses, which amount to 12 per cent of the workforce, include 7,000 employees being outsourced.
The remaining 25,000 will leave the company while 6,000 new workers will be hired, including staff needed for Deutsche Telekom’s T-Punkt shops.
The company, which was viewed as a potential bidder for O2, said the worldwide realignment of the industry, the rapid pace of technological change and, in particular, tough competition in the German fixed-line network and broadband sector had intensified the challenges it faced.
Deutsche Telekom pledged no compulsory redundancies would be made, predicting that most cuts would come from voluntary measures, such as part time working and severance payments.
Had it wanted to top Spanish phone firm Telefonica’s £17.7bn offer for O2, it would have been forced to pay a premium due to concerns that regulatory issues would delay a link-up. Analysts estimated it would need to find 230p-ashare compared with Telefonica’s 200p.
In a statement Deutsche Telekom’s chief financial officer Karl-Gerhard Eick said: “Deutsche Telekom will not make a counter-bid for O2. This would not be in the interests of our shareholders.” O2 stock slipped back on the news, having leapt more than 25 per cent on Monday when Telefonica’s agreed offer was confirmed, leading dealers to expect a bidding war. The shares closed 6 per cent lower at 197.5p last night.
