Footnote to my previous post:
NOW...
19,000 jobs will be cut at Deutsche Telekom
By Kevin J. O'Brien International Herald Tribune
THURSDAY, NOVEMBER 3, 2005
BERLIN Deutsche Telekom, the largest European phone company, said Wednesday it would cut 19,000 jobs from its German payroll over the next three years as it struggles to cope with what it called "massive changes" in the telecommunications sector.
The former monopoly, still 38 percent owned by the German government and its agencies, said most of the job cuts - amounting to 11 percent of its domestic work force - would come at T-Com, which provides fixed-line telephone services and has lost business since European Union markets were opened to competition in 1998.
The Bonn-based company said the reductions would cost 3.3 billion, or $4 billion, in the form of costly severance pay mandated under its union contracts.
Like other former telephone monopolies, Deutsche Telekom is struggling to adapt to a business environment that is changing radically through the introduction of new competitors and new technologies, including Internet telephony.
While the European telecommunications giants have moved aggressively into mobile and Internet services, losses in their fixed-line businesses have forced them to make sharp reductions in their payrolls. France Télécom, for instance, has cut more than 37,000 jobs, or 15 percent of its work force, since 2002, and now employs 206,000 people.
Deutsche Telekom said it would lay off 25,000 workers by the end of 2008, but by the following year the company would have hired 6,000 new workers, mostly lower-paid trainees and clerks, for a net loss of 19,000 jobs.
The company also plans to lay off 7,000 workers at Vivento, a partly owned subsidiary that retrains displaced workers for employment outside the group.
The company, which has expanded aggressively in Eastern Europe and the United States to offset the downturn in its domestic business, still employs 171,000 of its 244,000 workers in Germany.
Its chief executive, Kai-Uwe Ricke, said "massive changes" in the industry were forcing the job cuts.
"The worldwide realignment of the industry, the rapid pace of technological development and, in particular, the tough competitive environment in the fixed network and broadband sector in Germany imposed by the regulatory situation, are intensifying the challenges facing the entire Deutsche Telekom Group," Ricke said in a statement.
Analysts questioned the cost of the layoffs, noting that the severance packages, at an average of 174,000 per net job reduction, were about three times the industry average.
"This should be positive for Deutsche Telekom, but the only thing I can see at the moment are the very high costs involved," said Theo Kitz, an analyst at the investment bank Merck Finck in Munich. "The costs here are very high."
Deutsche Telekom shares closed in Frankfurt at 14.87, up 37 cents, or 2.5 percent. The shares may have gained in part on the company's statement that it would not make a counterbid for O2, the British wireless company. O2 this week agreed to be bought by Telefónica of Spain for £17.7 billion, or $31.3 billion.
Deutsche Telekom's dominance of the Continent's largest telecommunications market has faded since the European Union opened fixed-line services to competition. Arcor, which is owned by Britain-based Vodafone, and Tele2 of Sweden, as well as a host of smaller competitors, rushed in.
Since 1998, Deutsche Telekom has lost more domestic market share than any other former European monopoly, according to the German market regulator, Bundesnetzagentur. As of the beginning of this year, Deutsche Telekom had lost 40 percent of the German long-distance calling market and 11 percent of the local calling market, the regulator said in a recent report.
Deutsche Telekom, as a former government agency, is also wrestling with the legacy of Germany's generous but rigid welfare state. About 19.5 percent of Telekom's 171,000 German workers are tenured government employees who have lifetime job guarantees and whose salaries are set by legislators rather than by Telekom managers.
In 2004, in a bid to create 9,000 new jobs, the company agreed with its main union, Ver.di, to reduce the workweek of T-Com fixed-line workers from 38 to 34 hours. In return, T-Com workers gave up annual Christmas bonuses, which had amounted to a 13th month of salary.
Even after the payroll reductions take effect, Deutsche Telekom will remain one of the world's most overstaffed phone companies, said Frank Rothauge, an analyst at Sal. Oppenheim, a private bank in Frankfurt.
Rothauge said the company's domestic operation employs about twice as many workers per fixed-line connection as does NTT, Japan's dominant fixed-line carrier.
"That means the reductions Deutsche Telekom announced today are way overdue, given that the Japanese and others have been able to use advances in technology to reduce their personnel costs," Rothauge said. "And with the increasing use of Internet-based telephony at Deutsche Telekom, there were even more chances for efficiency gains and more superfluous workers."
In fact, Deutsche Telekom's payroll has grown in the past five years, as it hired workers to staff its overseas expansion but was constrained from firing workers in Germany. Its worldwide employment total has risen from 205,000 in 2000 to 244,000 as of June 30, according to its latest financial report, an increase of 19 percent.
Deutsche Telekom said most of the jobs will be cut from T-Com, with 1,500 cuts coming from central administrative positions and 5,500 at Telekom's T-Systems unit, which sells information-technology and telephone systems to businesses. At the same time, the company plans to add jobs during the rollout of a high-speed fiber-optic network.
iht.com
...AND THEN:
March 6, 1961
Executive Order 10925 makes the first reference to "affirmative action"
President John F. Kennedy issues Executive Order 10925, which creates the Committee on Equal Employment Opportunity and mandates that projects financed with federal funds "take affirmative action" to ensure that hiring and employment practices are free of racial bias.
factmonster.com
GREAT SOCIETY
Lyndon B. Johnson, early in his unexpected presidency, called on the federal government to create a "great society" in America. That phrase has since become synonymous with the domestic record of the two Democratic administrations of the 1960s. Many Great Society programs had their origins under John F. Kennedy but came to fruition after (and in part because of) Kennedy's untimely death. Others were responses to the particular social crises of Johnson's own troubled administration. Whatever their beginnings, however, the programs of the Great Society constituted the most important expansion of the American state since the New Deal.
Unlike the New Deal, which was a response to a severe economic crisis, the Great Society emerged in a period of unprecedented prosperity. Its first and most important programs emerged largely from within the government itself, a result of optimistic planning by policymakers who believed that American economic growth would make possible bold new public efforts. But some later Great Society initiatives were a result of social pressure from below, a response to the increasing militancy and intermittent violence of the black struggle for equality and to the conviction of many liberals that only a major public effort to fight urban poverty could prevent continuing social disorder.
[...]
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