updated 1/20/2005 10:23:18 AM ET 2005-01-20T15:23:18

Deutsche Telekom AG’s mobile phone arm, T-Mobile, said Thursday it would likely shed 2,200 jobs — about 10 percent of its work force — in order to save $195 million over the next two years. It said the cuts will be in Europe.

The cutbacks are part of a larger cost-cutting program aimed at saving about $1.3 billion every year, the company said, and which will include streamlining relationships with suppliers and vendors, better management of handset subsidies and making more efficient in-house use of other parts of Deutsche Telekom, such as relying on its T-Systems division for information technology services.

Most of the cuts — about 1,200 — would come in Germany, where T-Mobile is the largest mobile operator. Some 600 jobs, 130 of them in Germany, would be moved to other companies as some operations are outsourced, the company said.

The company statement said the savings program “could lead to” 2,200 lost jobs. Under German law the reductions must be discussed with employee representatives.

The job reductions would come as much as possible through measures such as not filling vacated positions. Beyond Germany, operations in Great Britain, the Netherlands, Austria and the Czech Republic would be included in the labor cost cuts, it said.

T-Mobile head Rene Obermann said the company was adjusting to a saturated European market where most people already had phones. “The mobile industry is facing changing times,” Obermann said. “The emphasis is no longer purely on growth in SIM cards, but in the development and maintenance of more intensive customer relations.”

“The course is clear, profitable growth at justifiable cost, not growth at any price.”

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