Over 10,000 Deutsche Telekom workers walk off the job

The strikes have also spread to a team wiring up services for officials and the media at the G8 summit next month on the Baltic coast.

One day after the Ver.di trade union announced that its members had overwhelmingly voted to strike, the Deutsche Telekom walkout began. On Friday 11,000 Telekom employees refused to turn up for work - the first serious industrial action at the company since it was privatized 12 years ago. The union's strike organizer Ado Willhem told reporters on Friday: "We can hold out for a long time."

The walkout is a reaction to the company's decision to outsource 50,000 employees at its troubled fixed-line unit T-Com to a new subsidiary - where they would be paid less while putting in longer hours.

On Thursday Ver.di, which represents 80 percent of Telekom workers, announced the results of its meeting the previous day: 96.5 percent of its members at Telekom had voted in favor of strike action. Telekom's finance director, Karl-Gerhard Eick, doesn't think the union is interested in a negotiated settlement to the dispute. "The strike is a clear sign that Ver.di is not ready for talks. But our door is still open," he told German news agency DPA. He said he thought the strike could go on for months.

The company's move to outsource staff is part of an attempt to remain competitive. On Thursday Telekom's CEO René Obermann announced the company's quarterly figures to a meeting of unimpressed shareholders: Telekom is bleeding customers to the competition and revenues are way down as a result. In the last quarter alone the company lost 588,000 fixed-line customers and its earnings had dropped to €459 million ($620.9 million) compared with €1.09 billion for the same quarter in 2006. Now Obermann wants to trim annual costs by up to €4.7 billion. But union officials argue that cutting wages is not the answer and blames the exodus of customers on mismanagement and an outmoded IT system.

Telekom is providing extra mobile lines and internet connections in and near Heiligendamm, an upscale beach resort where eight world leaders are to meet for two days from June 6. The technicians' strike has halted the work.