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. Last Updated: 07/27/2016

Deutsche Telekom's Plans Spark Strike

BERLIN -- Deutsche Telekom's chief executive appealed for union agreement to plans to cut pay and increase hours for service workers, and said in an interview released Saturday that the company might have to sell service units if there is no deal.

The plans have prompted the first major strike against Europe's biggest telecommunications company since it was privatized more than a decade ago. Some 10,000 employees walked off the job Friday after members of the service workers' union, ver.di, voted overwhelmingly to strike.

"We have no alternative to the reform course," CEO Rene Obermann was quoted as telling the Bild am Sonntag newspaper.

"The door to talks remains open. We want a joint solution with ver.di," Obermann added, the newspaper reported. "But if there is no solution with the union, we could be forced into sales of service operations to get costs under control; that would certainly be the worse solution for employees, and we don't want it."

Thousands of staff began strikes at Deutsche Telekom on Friday to protest against cost-cutting plans.

"We have called on 11,000 staff to join the strike," ver.di official Ado Wilhelm said.

The strike targeted call centers, technical support, and cable installation across the country.

Deutsche Telekom has enraged trade unions by trying to move 50,000 staff at its troubled fixed-line unit T-Com into lower-paying subsidiaries to cut costs.

Wilhelm said the union was well prepared to keep the strike going for a long time without being more specific.

A company spokesman said Deutsche Telekom did not expect major delays or disruptions.

"We have had to deal with short walkouts in the past couple of weeks, so we know what to expect," he said.

Management and workers' representatives have failed to reach a compromise over the cost-cutting plans, which Deutsche Telekom sees as a crucial element to remain competitive.

The company says it needs to transfer the workers as part of a cost-cutting plan to remain competitive. It has seen earnings tumble and market share erode amid fierce competition in the German market.

AP, Reuters