German incumbent Deutsche Telekom (DT) intends to go through with its plans to set up three new service units by 1 July 2007 despite a strike by staff over the proposals which is now entering its third week. The telco wants to transfer up to 50,000 staff to a new unit called T-Service with the aim of lowering labour costs by cutting wages. Chief Financial Officer Karl-Gerhard Eick said that the company is still striving to reach an agreement with trade union ver.di, which has opposed the plans and has been organising the strikes. DT wants to impose lower wages and longer hours on staff in return for limited guarantees that they will not be laid off until 2010, and negotiations have stalled. The telco, which has seen between 10,000 and 20,000 staff striking every day for over a fortnight, has said it is willing to extend its job guarantee for T-Service staff beyond the current proposal if talks are restarted, with personnel director Thomas Sattelberger telling press that job guarantees until the end of 2011 had already been offered as a result of recent union discussions. However, Eick warned that, if no deal can be reached with ver.di, DT will simply go ahead with its original plans, implementing labour agreements already in place with T-Mobile call centres and Viventi Technical Services, two units which could be transferred into the new T-Service unit. Eick said this would mean some staff working under even worse conditions than DT is offering in its new proposal. Under German employment law a company needs the approval of staff representatives and unions when it amends staff contracts. Ver.di has disputed the legality of applying the existing labour deals to the new unit, arguing that under German law, new deals need to be struck for the new divisions. Deutsche Telekom says it needs to cut domestic costs as its fixed line unit is rapidly losing business to smaller low-cost rivals.