DT’s T-Systems to Shed Up to 10,000 Jobs Under Turnaround Plan

Deutsche Telekom plans to shed around 10,000 jobs at its IT services arm T-Systems in an effort to turn the company profitable by 2020. The plans were announced by T-Systems CEO Adel Al-Saleh to staff and confirmed by the CEO to Handelsblatt.

The job cuts will take place over the next three years and include 6,000 positions lost in Germany. The restructuring includes plans to reduce the number of management levels from eight to five and cut the number of branches in Germany from 230 to around 20.

Al-Saleh, who took over as CEO at the start of this year, told the paper that the restructuring programme will be expensive, “because we want to make it as socially acceptable as possible, but this investment will be worthwhile”. The estimated cost savings are expected to reach EUR 600 million by 2021, double the EUR 300 million discussed at Telekom’s recent Capital Markets Day. Part of the money saved will be re-invested in new growth areas, such as the IoT.

T-Systems has in total around 37,000 employees, of which 18,000 in Germany. In the first quarter, the company generated an EBIT loss of EUR 38 million on sales down 2.3 percent to EUR 1.6 billion. – Telecompaper