VIENNA - MASSIVE job cuts in Austria's postal services and a major telecommunications company have put its leaders, already stuck in an Austrian Airlines privatisation quagmire, in a tight spot.

After a mass privatisation campaign by the government in recent years, the few remaining companies still partly under state control have been churning out bad news in the last few days.

The country's telecoms giant Telekom Austria, still 27.37 per cent owned by the state, also confirmed on Monday that it would cut 2,500 jobs out of its 11,400 positions in Austria in the next few years, following a drop in its fixed net operations.

The Post, which was floated on the stock exchange in May 2006 and is 51 per cent state-owned, wanted to 'get ready in time' for the liberalisation of EU postal services in 2011, CEO Anton Wais said on Monday, while refusing to comment the figures.

The plan, which was to be adopted formally on Wednesday, has seen trade unions and local politicians up in arms.

The president of the Austrian federation of municipalities, Helmut Moedlhammer, denounced the 'massive cut' and said he had not ruled out bringing the affair to court, as has the opposition Green party.

Meanwhile, postal union head Gerhard Fritz called on Finance Minister Wilhelm Molterer on Sunday to stop 'a crazy strategy' that he said risks destroying the service. The smaller Christian trade union has also called for a referendum on the issue.

Infrastructure Minister and chancellor-designate Werner Faymann, a Social Democrat, has given Mr Molterer all the blame and called for local politicians to be given veto rights over the closures.

'Before 9,000 post office workers go, the board of directors must go,' he said on Monday, cited by a spokesperson.

'The day when politicians controlled what happened in a company are hopefully over and will never come back,' Mr Molterer countered.

Analysts see various reasons for these massive cuts: on the one hand, privatisation concerns and worries over falling share prices - Telekom shares have dropped 45 per cent on a yearly basis, the Post is down 14 per cent - and on the other, poor management by directors nominated by the state.

Both camps are pointing fingers at the ongoing privatisation of Austrian Airlines (AUA), which some have deemed too rushed and others too slow, and which could prove to be a disaster.

The privatisation period was extended until the end of the year after German airline Lufthansa, the only potential buyer to make a binding offer, reportedly demanded that the state take over 500 million euros (S$951 million) of AUA's total debt of more than 900 million euros, while offering to pay only a symbolic price for the airline.

The Post and Telekom Austria are now counting on the state to take care of the 3,000 and 2,000 tenured employees they each plan to let go. This could be done via a public agency that would pay employees' salaries without their having to work.

For Telekom Austria, limiting its fixed net operations, which make up half of its workforce but only bring in 12-13 per cent of its total earnings, will be key to its survival.

Nine-month results are to be published on Wednesday, with analysts predicting a 17.3 per cent drop in profit to 373.4 million euros. -- AFP