Company to cut 22,000 workers

FRANKFURT, Germany -- Deutsche Telekom will cut 22,000 jobs, or 9 percent of its work force, by the end of 2004 to slash costs and get the telecommunications giant out of debt, its president said Tuesday.

Ron Sommer said the German firm, whose shares hit a new low last week, will save more than $9.2 billion through the measures.

Telekom will pare almost 30,000 jobs in from its 245,000-strong work force in Germany by the end of 2004, Sommer told shareholders at their annual meeting in Cologne.

But he said Telekom plans to hire staff in the same period, meaning the total number of job cuts will be 22,000.

Deutsche Telekom also will shed some real estate holdings and its remaining stake in cable networks, Sommer said.

Deutsche Telekom, which is 43 percent owned by the German government, lost $3 billion in 2001 after buying U.S. mobile-phone company VoiceStream and investing heavily in mobile phone services.

The shares have also suffered as earnings disappointments hit other major telecommunications companies.

Sommer has come under fire from shareholders, who hold him largely responsible for the company's $60 billion debt and continued losses.

The slump in share prices is "no longer comprehensible and can only be explained with psychological mechanisms," Sommer insisted Tuesday, defending his strategy as future-oriented. The bulk of Deutsche Telekom's debts stem from investments in licenses for new mobile networks.

First-quarter losses for the company totaled $1.66 billion.