O2 Germany to Cut 700 Jobs

DUESSELDORF, Germany -(Dow Jones)- O2 Germany, part of Spanish telephone firm Telefonica, Monday said it plans to cut 700 jobs, or around 15% of its workforce, by mid-2008.

The cuts, which will mostly reduce the number of back-office functions, will be implemented without forced redundancies, O2 Germany said, adding that the company's works council was notified earlier Monday.

O2 Germany, which employs around 4,700 workers, declined to provide financial details of the plans.

The company is Germany's smallest wireless-network operator by sales and has seen the gap with nearest rival E-Plus, the German unit of Royal KPN, grow in recent quarters.

Deutsche Telekom's T-Mobile and Vodafone Group's D2 are Germany's leading wireless operators.

The job cuts are part of a larger overhaul spearheaded by recently appointed O2 Germany Chief Executive Jaime Smith, with the aim of making the company more flexible to increase its ability to react to market changes.

Smith is creating a new structure at O2 Germany, with separate network technology, service technology and product development and brand management units.

Company Web site: http://www.o2.com

-By Stefan Mechnig, Dow Jones Newswires; +49-30-28884121; stefan.mechnig@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 23rd July 2007