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UPDATE 1-Telecom Italia agrees lay-offs deal with unions

* Deal sees 3,900 voluntary redundancies-union source

* Lay-offs part of company’s three-year business plan

* Shares down 0.58 pct, in line with sector

(Adds company confirmation, details, shares)

ROME, Aug 4 (Reuters) - Telecom Italia TLIT.MI and unions have reached agreement over workforce lay-offs, a company spokeswoman said on Wednesday.

Telecom Italia, Europe’s fifth-biggest phone company by market value, wants to make the cuts under its three-year business plan. The spokeswoman declined to give details beyond saying union comments were substantially correct.

The deal will be signed at the Industry Ministry at midday, she said.

“I confirm that there has been an agreement,” the spokeswoman said.

A union source said the text of the agreement was being fine-tuned and would be signed shortly.

The agreement includes 3,900 voluntary redundancies plus the reallocation and training for a further 1,550 workers who will be transferred to other company posts, the source said.

The agreement was reached in talks held at the Industry Ministry after the government intervened last month.

Italy’s unemployment rate is currently running at 8.5 percent of the workforce.

In its three-year plan, Telecom Italia was aiming to lay off 5,720 workers, with 3,700 carried out by the end of 2011.

At 0730 GMT Telecom Italia shares were off 0.58 percent at 1.025 euros. The STOXX Europe 600 Telecommunications index .SXKP was down 0.56 percent. (Reporting by Alberto Sisto; Writing by Nigel Tutt; Editing by Greg Mahlich)

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