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Deutsche Telekom workers strike

Kyle James May 11, 2007


BOB MOON: Does this ring a bell? Too many customers are doing without the old, wired-to-the-wall service and the phone company needs to shed those jobs and cut costs. Turns out that’s a global phenomenon. Workers are on strike today against Deutsche Telekom, prompting one German comedian to joke that the four remaining customers aren’t likely to notice any disruptions. As Kyle James reports from Berlin, the issues are familiar.

KYLE JAMES: It’s the first strike at Deutsche Telekom in over a decade.

Workers are angry at a cost-cutting plan that would move 50,000 call center staff to a new division. Their new contracts would lengthen the work week and cut their salaries.

The plan is part of the struggling company’s strategy to get on a firm footing. Once a monopoly, Deutsche Telekom has been hit hard by new upstarts. Martin Gutberlet is a telecoms analyst at Gartner Research.

MARTIN GUTBERLET: In Germany we have very tough price competition between the alternative and the incumbent, Deutsche Telekom. And furthermore it’s a clear trend that less people are using a traditional fixed line, therefore the fixed business is almost eroding right now.

Profits at that fixed-line business, once the company’s cash cow, fell by almost 18 percent in the first quarter.

Both sides in this strike have dug in and analysts say it could go on for weeks.

In Berlin, I’m Kyle James for Marketplace.

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