Telecom Italia Unions Seek to Block Call-Center Unit Split

Telecom Italia SpA, the biggest Italian phone company, started final negotiations yesterday with unions about a plan to cut 2,750 jobs, or more than 5 percent of its domestic workforce, by 2014.

Telecom Italia is planning so-called solidarity contracts, revising the conditions of 30,000 employees. That’s the entire Italian workforce excluding Open Access, a division established in 2008 to guarantee Telecom Italia’s competitors equal access to its fixed networks. Unions oppose the creation of a new company containing all 12,000 call-center employees.

“We will accept solidarity contracts only if Telecom Italia reverse its plan to establish a new call-center company that could later be sold,” said Riccardo Saccone, an official at union Slc-Cgil. A representative of the Milan-based company declined to comment.

Phone companies across Europe have made job cuts as the sovereign debt crisis hurt demand. Vodafone Group Plc announced a plan this month to eliminate 700 positions in Italy. Last year, Deutsche Telekom AG began a reduction of its administrative workforce in Bonn by 1,300 through 2015. It was reviewing additional job cuts in December, according to two people with knowledge of the matter. Spain’s Telefonica SA has also been shrinking its workforce.

Telecom Italia shares rose 1.4 percent to 59 euro cents at 9:54 a.m. in Milan trading, paring the decline to 14 percent this year.

Outsourcing Revenue

Last October, Telefonica, a Telecom Italia shareholder, sold its Atento call-center division to Bain Capital Partners LLC. The transaction gave Atento an enterprise value of more than 1 billion euros ($1.3 billion) and helped Madrid-based Telefonica offload almost half of its workforce. Italian unions are concerned that Telecom Italia could do the same with its call-center services.

Outsourcing Italian call centers generated 1 billion euros in revenue last year and those operations employed more than 80,000 people, according to call-center trade association Assocontact.

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