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Jobs axe finally swings at ailing T-Systems

International IT services firm T-Systems has made progress in its previously announced plans to cut 10,000 jobs from its payroll over the next three years. In Germany, where the Deutsche Telekom subsidiary's axe will mainly fall, the staff workers' council there has reached agreement with the company for about 5,600 job cuts by 2021.

In the deal, around 3,800 positions will go altogether by the end of 2020 at the company, which currently employs about 37,000 staff. Another 1,200 jobs will remain at risk until 2021, and any decision to cut them will be dependent on the effectiveness of T-Systems' ongoing rationalisation programme.

In addition to the above, the company expects "several hundred" staff to leave the struggling firm through their own choice this year. Despite the cuts though, the firm is still open for those staff affected to be able to apply for new jobs that are expected to be created in other areas of the firm. Adel Al-Saleh took over as CEO of T-Systems at the beginning of the year, and is targeting €600m in savings from the job-cutting. T-Systems made an operating loss of €1.36bn in 2017, with sales plunging by €1bn to €6.9bn.

Al-Saleh is also targeting management layers for cuts too, with up to 40% fewer management positions expected to be in place at the beginning of 2019.

While areas of staffing are being cut, there are still investments being made in infrastructure. T-Systems recently opened an expanded data centre in Magdeburg, Germany, which will form part of its international cloud services hub.