Since the early 1980s employment figures of public telecommunications operators have been on a steady decline, shrinking by 8.5 percent between 1985 and 1995. Considering that reductions began early (in the early 1980s) and were particularly extensive in some countries with a low degree of liberalization, it must be surmised that the pruning was primarily due to digitalization rather than increased competition. Liberalization, on the other hand, provides the incentives to actually implement savings potentials of new technologies and organizational developments. For equipment manufacturers, liberalization means a more difficult economic environment as their traditionally close links to telecommunications operators are severed. In Europe, production is expected to grow while at the same time employment is likely to decline. In the services sector, on the other hand, job growth should make a considerable contribution to the overall employment situation in the telecommunications sector. Existing studies indicate that while employment in the services sector will rise in the mid run, this should not be assumed to significantly relieve the overall employment situation. The analysis of the employment situation in the Austrian telecommunications sector includes Post & Telekom Austria (PTA), the mobile communications operators, alternative network providers, value-added service providers, cable TV operators and the telecommunications equipment industry, i.e., those sectors that are directly affected by liberalization. Together they employ some 35,000 people. In general, prospects are good that employment in the telecommunications sector will grow in spite of liberalization. The decisive factors for this are moderate staff cuts at PTA, the generally positive development of the mobile communications sector (including paging services) and a likely increase in the number of alternative infrastructure providers, cable companies and value-added service providers. As to equipment manufacturers, it is assumed that employment will not change significantly. In total this results in an expected change of –350 to +3,000 between late 1997 and 2000. An important consideration is the fact that the indirect impact of investments, etc. on other fields is not included in this figure. Macroeconomic employment effects therefore are markedly more positive, which in turn improves the general balance.