UPDATE 2-TNT agrees lay-offs deal with unions to end strikes

Thu Dec 16, 2010 5:24am EST

* Deal agreed to reduce forced lay-offs by 1,700

* Unions agree to end rolling strikes

* TNT shares flat, in line with index

(Adds analyst, union comments, shares, details)

By Aaron Gray-Block

AMSTERDAM, Dec 16 (Reuters) - Dutch group TNT TNT.AS said on Thursday it reached an in-principle agreement with postal unions to cut the number of forced lay-offs, ending strike action that threatened to derail a possible mail unit sale.

TNT workers have held a series of strikes in the past month in protest against the number of forced redundancies at TNT, which plans to axe 11,000 jobs in mail to adjust to the rise in electronic communications and increased domestic competition.

The company had said in the summer the number of forced job cuts could total 4,500, but agreed on Wednesday to cut that number by 1,700. That was more than an earlier compromise offer of a 1,400 reduction rejected by unions. [ID:nLDE6AF15S]

"The unions will present the agreement in principle to their employees with a recommendation for acceptance, and will not undertake further industrial action," TNT said.

KBC Securities analyst Dieter Furniere said the deal will allow TNT to finalise its targeted 430 million euros ($573 million) savings over 2010-17 and eliminate a "strike overhang" around the stock.

"Finally, some light is seen at the end of the tunnel," he said in a note.

Shares in TNT were flat at 19.01 euros at 0918 GMT, in line with the Amsterdam AEX index .AEX.

TNT is splitting its express division from mail with the internal separation due to be completed on Jan. 1.

It is exploring a sale in its mail unit and there were fears more strikes would add to the problems of falling postal volume. [ID:nLDE6B106N]

A spokesman for union FNV Abvkabo told Dutch state broadcaster NOS that unions had squeezed all they could out of the deal and that consultations with members for final approval will continue into the new year.

On top of the reduction in forced lay-offs, TNT said it would study ways of keeping an extra 200 jobs at its auto unit during future restructuring. The company will also be offering 300 employees temporary employment up to the end of 2013. Calling it a "bittersweet" deal, TNT spokesman Toby Ellson said the company "still has a lot of lay-offs to deal with" and declined to say how much the strikes had cost TNT.

TNT's mail unit has faced serious disruptions in the past month with a series of rolling strikes in the Netherlands, the first such industrial action at TNT since 1983.

($1 = 0.7506 euro)

(Reporting by Aaron Gray-Block; Editing by Hans Peters and David Hulmes)

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