TNT clinches restructuring deal with unions

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0.7 pct wage increase from Jan. 2010, 1 pct Jan. 2011


* Deal will lead to large number of job losses

* TNT shares up 1.4 percent

(Adds detail, TNT, union, analyst comment, shares)

AMSTERDAM, Jan 29 (Reuters) - Dutch mail company TNT NV reached a wage agreement with trade unions on Friday, a deal that will mean thousands of job cuts at its struggling postal unit.

The agreement ends a drawn-out conflict between Europe's second-largest mail company and workers over wages and job cuts, and removes the threat of strike action, which has plagued such peers as Britain's Royal Mail.

The deal is for small wage increases over the next two years, but will come with deep job cuts. The company had initially asked for wage cuts, promising fewer job losses, but the unions turned the proposal down.

TNT said the job cuts will be less than the 11,000 figure it had initially said would come with a pay rise but would not confirm the number of jobs to be axed.

"We are satisfied with the deal and we reiterate our annual masterplan savings target of 395 million euros from 2015," a TNT spokesman said.

"It is too early to talk about job cut numbers because we have a mobility programme where people can move to other parts of the company. But the positions eliminated will be in the thousands."

TNT shares were up 2.16 percent to 20.82 euros at 1327 GMT, outperforming the Amsterdam blue-chip index .AEX, which was up 0.9 percent.

Like larger rival Deutsche Post (DPWGn.DE), TNT has been struggling to cope with falling consumer demand, including a 6 percent annual volume decline in its postal unit, while coming to terms with the liberalisation of the mail market.

"The announcement helps to reduce TNT's mail structural cost base by about 125 million euros, according to our estimates, and therefore reduces the investment risk on TNT," ING analyst Axel Funhoff wrote in a note, assuming about 3,500 job cuts.

The agreement, which runs until Jan. 1, 2012, is for a 0.7 percent wage increase effective as of this month, a 1 percent rise in January 2011 and a 0.2 percent increase as of Oct. 1, 2011.

Unions at the end of last year rejected TNT's proposal for a pay cut of up to 3.5 percent but with fewer job cuts.

By opting for a wage rise instead of a cut, workers now face wholesale job cuts, which unions said was a regrettable, but acceptable trade-off.

"The social plan offers a balanced mix between measures to stimulate redundancy, agreements over assistance in finding new employment and redundancy payments," union Abvakabo FNV said in a statement. "The expected forced lay-offs, however, will not be prevented by this agreement."

The unions said it would advise their members to accept the deal. The results will be known in mid-March. (Reporting by Harro ten Wolde and Greg Roumeliotis; editing by Karen Foster)