Greece-based operator OTE has outlined proposals that would drastically cut its workforce and save it hundreds of millions of Euros.

OTE, which is 40% owned by Deutsche Telekom, said it needed to reduce payroll costs by €300 million over the next four years.

The proposals were made by OTE management at a meeting with representatives of the company’s OME-OTE union.

In a statement, OTE said the reduction was necessary “to align [personnel costs] with those of European peers and for the company to become competitive and ensure its sustainability.”

Specifically, OTE management want to takeaway the “permanent tenure” privileges of employees hired before 2005 – in other words, end a jobs-for-life culture that applies to 75% of OTE's workforce.

They also intend to freeze current pay levels and introduce a new payroll structure that links pay to performance.

A range of other benefits will also be abolished, including some relating to sick leave.

The company also proposed “different schemes” of voluntary redundancy.

In May, the company revealed it had spent €39.7m on headcount reduction and early retirement programmes.

OTE’s share price has fallen 75% in the last three years. Its latest financial results, for Q1 2011, saw a revenue decline of 12.6%. For the last financial year it posted revenues of €5.5bn, a fall of 8% on the previous year.