The offer from T-Systems foresees a 1.6 percent raise on April 1 of next year and would extend a pledge to refrain from compulsory redundancies by two years.

"Twelve empty months and a small percentage increase in 2019 would mean a massive loss of incomes in real terms," Verdi pay negotiator Michael Jaekel said in a statement. The union demands a 5.5 percent raise.

T-Systems' CEO Adel Al-Saleh, in charge since the start of the year, wants to cut 10,000 jobs in a push to return the unit to profitability, but has yet to win the support of labour leaders for his turnaround strategy.

(Reporting by Douglas Busvine; Editing by Maria Sheahan)