E.ON, labour unions reach deal on job cuts

FRANKFURT Aug 8 (Reuters) - Germany's largest utility E.ON (EONGn.DE) and the Verdi and IG BCE labour unions have reached a basic agreement over the company's cost-cutting programme, ending months of tension and averting a threatened strike.

According to a joint statement from E.ON and the unions, the utility will refrain from "redundancy-related" layoffs until 2012, although it will lower its domestic workforce through retirements, outsourcing and other attrition of posts.

A Verdi representative told Reuters that around 2,000 of the approximately 40,000 positions in Germany will be terminated.

The majority of these terminated positions will be in the company's IT unit, Sven Bergelin, a member of Verdi's Energy und Mining executive committee, said.

In addition the company will cut 300 administrative positions at its centres in Duesseldorf, Essen and Munich, Bergelin added.

E.ON declined to comment on the exact number of the positions to be cut.

The job cuts are part of E.ON's cost-cutting programme aimed at saving 1.5 billion euros ($2.15 billion) in costs by 2011. (Reporting by Tom Kaeckenhoff and Tyler Sitte; editing by Patrick Graham)