BUDAPEST, Oct 1 (Reuters) - Magyar Telekom will lay off 500 workers by the end of this year at a cost of about 6 billion forints ($27.08 million)to cut costs, the company said in a statement on Monday.
The Deutsche Telekom unit said it expected to shave 5.6 percent off total workforce costs, excluding severance payments next year compared with 2011 spending levels.
The layoffs do not include the employment termination of executives and workers retiring, the company said.
It said employees remaining with the company would receive a 4 percent wage increase next year to maintain the real value of their income.
Magyar Telekom shares closed at 425 forints on the Budapest Stock Exchange on Friday.
($1 = 221.58 Hungarian forints)
(Reporting by Gergely Szakacs; Editing by Louise Heavens)