TELECOM Italia will cut 5,000 jobs by 2010, mostly through the merger of the fixed and mobile units, Chief Executive Franco Bernabe said in an interview published yesterday.
The company cuts are part of a three-year plan to reduce costs by 300 million euros (US$463 million) a year and increase efficiency at Italy's dominant telecoms operator.
Bernabe, who took over Telecom Italia in December, said the cuts were needed to continue investments in new technologies at a time when the price of services keeps going down.
"We can't continue to reduce prices without cutting costs, otherwise we would have to stop investments," Bernabe said in an interview with the business daily il Sole-24 Ore.
Most of the job cuts would be realized through the merger of Telecom Italia's fixed line business with the TIM mobile unit as part of plans for complete convergence of the mobile and fixed-line businesses, Bernabe told the newspaper.
Bernabe also said Telecom Italia was continuing to look for synergies with Spain's Telefonica, which last year acquired a 24-percent controlling stake with Italian institutional investors, but that an industrial merger was "not on the horizon." He said 1.3 billion euros in synergies had been realized.
Telecom Italia's shares were trading up 2.8 percent at 1.43 euros on the Milan Stock Exchange yesterday.