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T-Mobile is axing 2,200 jobs - one in ten of its European workforce in a massive cost-cutting exercise to save €1bn (£693m) a year.

Some 1,200 jobs will be axed in Germany alone as the company embarks on a new scheme called 'Save for Growth'.

Jobs will be lost in T-Mobile's other country operations including the UK, which employs 6,500 staff, although workers here won't be told details until tomorrow. US jobs are not included in the cuts.

T-Mobile International chief exec René Obermann said: "We will do everything we can to see that the whole process is carried out in as socially acceptable as possible."

In effect, T-Mobile is restructuring its business to reflect a shift away from customer acquisition towards better customer retention.

Said Obermann: "The mobile industry is on the verge of a shift from the focus being on growth purely in SIM cards to the development and maintenance of deeper customer relationships. The course is clear: profitable growth at reasonable costs instead of growth at any price; simple and inexpensive tariffs coupled with realistic handset prices."

So, the cellco is reducing handsets on offer from 50 to 30-40; this should simplify procurement and help it negotiate lower prices with suppliers.

T-Mobile is also looking to network efficiency gains and it aims to use more ecommerce and telesales to flog phones and tariffs. ®

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