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Telekom subsidiary „T-Systems“: Up to 5000 employees transfer to sister company

Telekom subsidiary „T-Systems“ : Up to 5000 employees transfer to sister company

Deutsche Telekom subsidiary T-Systems wants to simplify its organisation. 3,000 to 5,000 T-Systems employees are therefore moving to the sister company Telekom Deutschland, explained T-Systems CEO and Telekom Board Member Adel Al-Saleh.

Musical chairs at Deutsche Telekom: 3,000 to 5,000 T-Systems employees will move to Telekom Deutschland as part of organisational changes. T-Systems CEO and Telekom board member Adel Al-Saleh said that this number would only be determined more precisely in the coming months. As announced by Deutsche Telekom in August, business with telecommunications services for large customers will in future be managed by the German division. Income and contracts for the affected employees will remain unchanged. T-Systems has been making losses for years.

Plans presented on Wednesday

On Wednesday, Adel Al-Saleh presented his employees with detailed plans for restructuring the business customer division. 500 employees came personally to the headquarters in Bonn, 10,000 followed the broadcast of the event on the Internet.

"Our organisation today is super complex," Al-Saleh said afterwards. It must become easier for corporate customers to purchase IT services. "Nobody could give me a logical answer as to why we are positioned the way we were," said the manager.

T-Systems will focus on IT and digital offerings for 1000 multinational corporate customers in the future. In the future, the division aims to generate revenues of around four billion euros. Last year, T-Systems generated revenues of EUR 6.9 billion. The goal is to be the market leader for IT services in Germany and to have a good market position in five or six other countries.

Implementation planned for 2020

The implementation of the new strategy is planned for the second quarter of 2020, Al-Saleh said. The US manager has been with Deutsche Telekom since the beginning of 2018 to restructure the crisis-ridden corporate customer segment. Al-Saleh announced last year that he would cut around 10,000 jobs worldwide, 5600 of them in Germany. Last year, T-Systems employed around 37,000 people worldwide, around 18,000 of them in Germany. Bonn is currently home to 1372 employees. T-Systems used to have 600 managers, 250 of them now. Some had left the company, others had been retrained. "We are an employer that attaches importance to social compatibility," emphasized Al-Saleh. The program is expected to cut costs by around 600 million Euro. "We have covered half the distance", Al-Saleh explained. His goal is to generate a positive cash flow again by the end of 2020 and to move permanently into the profit zone in the years thereafter.

T-Systems plans two spin-offs

T-Systems is also planning two spin-offs. The two business units "Security", behind which the Internet security business stands, and "IoT" (Internet of Things) will be outsourced to independent GmbHs, but will remain part of T-Systems. "We want to give them more freedom," says Al-Saleh. The new structure facilitates partnerships and takeovers. Growth is the goal. Further changes to the portfolio are expected by the end of the year.

Of course, the restructuring plans had unsettled employees. But Al-Saleh says he firmly believes that the systems business has a future for Telekom. Geopolitical changes with more crisis regions around the world have led many customers to buy services from Germany.

(Original text: Claudia Mahnke, Economy Editor; Translation: Mareike Graepel)