THE HAGUE, The Netherlands -- KPN intends to reorganize its IT activities within the Fixed division. The aim is to become more effective and to offer new services to the market at lower costs. Processes will be optimized, applications and systems will be replaced and reduced and the IT infrastructure will be changed. The resulting reorganization, which will mean the loss of about 700 jobs, will begin at the start of 2005 and will be complete by the middle of 2007. Wherever possible, compulsory redundancies will be avoided, but cannot be excluded. The Severance Scheme will apply to staff who loose their job.

The Central Works Council has been informed of the measures in the IT field and KPN is awaiting its recommendations. These staff reductions are additional to the reductions announced recently at EnterCom, 750 jobs, and the 800 jobs to be shed in the Fixed division which was already announced last January.

KPN Telecom NV