Telecom Italia to Cut 5,000 Jobs by 2010

MILAN -(Dow Jones)- Telecom Italia said Wednesday it will cut about 5,000 jobs in Italy by 2010, with a reduction in costs of about EUR300 million a year after the implementation of an efficiency plan.

In a statement, Italy's largest telecoms operator said the plan will incur additional restructuring charges of about EUR250 million, compared with the EUR100 million already included in its 2008 business plan.

These charges will mainly affect 2008 results and the relative targets announced in March, the company said, adding they will be more than offset by savings expected in the next two years.

Italy's former monopoly, which is making cost cutting a top domestic priority to boost profitability, also unveiled a reorganization of its business structure. It currently has about 83,000 employees.

It created a new division for its domestic market operations that will have the task of integrating management of the current fixed, mobile and top clients structures.

The new division will be headed by Telecom Italia executive Oscar Cicchetti, who will continue to head international activities.

The new structure will bring cost efficiencies and improve competitiveness, Telecom Italia said.

Telecom Italia's new management, which took over in December, has pledged to focus on debt reduction and expansion in core domestic and international markets including Germany and Brazil, but ruled out more aggressive moves due to financial constraints.

The phone group is seeing its profitability declining at home because of intense competition and regulatory pressures.

-By Giada Zampano, Dow Jones Newswires; +39-02-58219907; giada.zampano@dowjones.com

(END) Dow Jones Newswires

Posted to the site on 4th June 2008