Telecom Italia SpA will cut an additional 4,000 jobs by 2011 as it concentrates on core growth markets in Italy and Brazil to confront the deteriorating economic situation, CEO Franco Bernabe said Wednesday.

The 4,000 job cuts are in addition to 5,000 announced in June, and will reduce Telecom Italia's work force by 14 percent from 64,000 to 55,000. Bernabe said the number of managers will be cut in half as the company seeks to simplify its organization.

Bernabe, who was presenting an update to the company's 2009-11 business plan to analysts in London, also said the company will focus on its core businesses in Italy, as a cash-generator, and Brazil, as a growth market. Bernabe said other operations could be sold under the right conditions.

"All of this would allow us to create a solid platform to grow shareholder value," Bernabe said.

He identified Brazil as an important source of growth for the company, reaffirming the company's commitment to Tim Brazil, the number three player in the Brazilian mobile market, amid recent media speculation that Telecom Italia was considering spinning it off.

The new business plan forecasts 2.5 million mobile broadband customers in Brazil by 2011 for an estimated market share of 25 percent.

Bernabe said any assets outside of Italy and Brazil "can be disposed. But we will see the conditions. ... We will do it in a very careful way in order not to sacrifice value."

Telecom Italia also owns the German broadband company Hansenet and a stake in the holding company that controls Telecom Argentina. It sold its French business this year.

Bernabe declined to discuss whether dividends will be cut, after cutting it in half last year. A decision will be made in the coming months, Bernabe said.

Italian telecommunications authorities are expected in coming days to state their views on the former telecom monopoly's plans to guarantee competitors access to its fixed-line network. Negotiations have been going on for more than two years, through several management changes.

"We think the network is core for our business," Bernabe told analysts, ruling out the possibility of spinning off the network as a separate business.

Source: AP News