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Deutsche Telekom gains union deal

Deutsche Telekom has secured a deal with unions that will see 50,000 support center workers accept both lower pay and longer working hours.

The cost-cutting agreement comes after six weeks of bitter walkouts at German's largest telecoms group. The affected staff, at the firm's main fixed-line unit, will now see their pay cut by 6.5%, while their working week will go up by four hours to 38 hours. In return, they will gain job security until the end of 2012.

Financial woes
Deutsche Telekom's T-Com fixed line division has faced financial difficulties in recent years, because of cheaper competitors in the traditional phone line sector and the growing number of people choosing just to have a mobile phone. The company said it had to reduce salaries at T-Com, which has 80,000 workers in total, in order to improve its competitiveness. It initially proposed a 12% pay cut. The deal with the unions comes after a week of talks. Last month, the firm reported a 58% fall in three-month profits, after more than half a million customers left its fixed-line business. (