Union Says Will Cut Back Deutsche Telekom Strikes From Friday

DUESSELDORF, Germany -(Dow Jones)- Labor union ver.di Thursday said it will reduce strikes at Deutsche Telekom from Friday to a level of 10,000 staff participating from an average of around 15,000 in previous weeks.

The decision was made as both parties have resumed negotiations Wednesday to try and find a compromise on Deutche Telekom's plans to transfer 50,000 staff into new units while lowering their wages.

The union said, while talks will resume this afternoon, 15,000 Deutsche Telekom staff are still on strike Thursday.

Under German labor law a company needs the approval of the unions when it amends labor contracts. Deutsche Telekom is scrambling to reach a compromise as it has promised to meet its deadline for the staff transfer of July 1.

In April, ver.di walked away from the negotiating table, rejecting Deutsche Telekom's proposal to cut wages by 12% over a 30-month period, while at the same time pledging to forego layoffs until 2010.

Talks resumed Wednesday as Deutsche Telekom had reached out late last week to ver.di, saying it would be willing to extend the job guarantee to a later date, while also considering paying employees a higher bonus.

The union Thursday reiterated that it expects negotiations with the German telecommunications company to continue until at least Tuesday.

Deutsche Telekom's plans are core to its efforts to lower costs in Germany, as its fixed-line unit is rapidly losing business to smaller low-cost rivals.

-By Stefan Mechnig, Dow Jones Newswires; +49-30-28884127; stefan.mechnig@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 14th June 2007