UK-based mobile operator O2 may cut up to 1,000 jobs, or 20 per cent of its staff base, at its German business, according to reports on Tuesday.

According to a report in the Financial Times Deutschland, O2, which was bought up by Spanish carrier Telefonica last year, will make the cuts to reduce personnel costs.

An O2 spokesman would only say that the company is looking at a number of cost reduction programmes and that Germany is a very tough market.

The company has embarked upon cost cutting exercises in other parts of the business in recent months.

O2 Ireland cut its workforce by 5.5 per cent, or around 100 jobs in March, citing increasing competition as the reason. And in April, Australian investment bank Macquarie bought O2 UK’s emergency services unit, Airwave, for Eur2.982bn in cash.

Telefonica is due to report its first quarter results on Wednesday and is expected to give more details. A source close to the company said that reports of 1,000 jobs to go may be overblown.

For the eleven months to December, O2 Germany increased revenues 6.7 per cent to Eur2.8bn, while operating earnings (OIBDA) remained flat at Eur631m. The German unit added 396,000 net new customers in the fourth quarter, taking the base to 11 million.