MILAN: Telecom Italia (TIM) plans to cut up to 1,300 jobs in Italy this year, two union sources said on Monday, as the country's biggest phone group revamps its business amid the COVID-19 crisis.

The potential cuts would amount to around 3% of TIM's 42,600 employees in Italy and will be implemented through an early retirement scheme. The company is also considering hiring new personnel to boost a digital drive, the sources said.

TIM's managers have informed union representatives of the plan and have said the redundancies will be on a voluntary basis.

TIM was not immediately available for comment.

The company has already reduced its workforce, with more than 2,500 people leaving the group in 2020.

The former phone monopoly, whose revenues in its key domestic market fell 7.7% last year, is looking to expand its services operations, developing a newly created cloud unit and boosting its cybersecurity, video streaming and Internet of Things (IoT) business.

Under a three year plan unveiled last month, Chief Executive Luigi Gubitosi said the group aims to more than double revenues coming from these so-called 'adjacent markets', worth nearly 700 million euro ($831.11 million) last year.