Deutsche Telekom to cut 4,000 jobs at IT unit T-Systems

FRANKFURT Mon Dec 2, 2013 2:17pm GMT

The logo of Deutsche Telekom is pictured on the 266 metre high ''Colonia'' TV tower in the western German city of Cologne March 25, 2013. REUTERS/Wolfgang Rattay

The logo of Deutsche Telekom is pictured on the 266 metre high ''Colonia'' TV tower in the western German city of Cologne March 25, 2013.

Credit: Reuters/Wolfgang Rattay

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FRANKFURT (Reuters) - Deutsche Telekom plans to cut around 7.5 percent of jobs in the next three years at its IT services business T-Systems, a company source said on Monday.

The plan to cut about 4,000 jobs out of a total of almost 53,000 is expected to be put to the company's supervisory board at a meeting in mid-December, the person with knowledge of the plans said.

Earlier German newspaper Handelsblatt had said the company was planning to cut as many as 6,000 jobs, which could include lay-offs for the first time since 1949.

"It will be closer to 4,000 jobs," said the source.

In an internal memo seen by Reuters, T-Systems chief Reinhard Clemens alerted his workers to the need for a restructuring in order to respond to competition from "unexpected corners".

"We will spell out the developed approaches more clearly in the coming weeks and then communicate concrete measures which will be taken," Clemens said in the memo, sent on Monday.

T-Systems, which caters for global enterprises such as Siemens, ThyssenKrupp and Deutsche Post DHL, employs almost 53,000 workers, of which more than 29,000 are based in Germany.

T-Systems is rushing to meet surging demand for so-called cloud computing, which enables clients to reduce costs by ditching bulky local servers for network-based software and storage in remote data centres.

Deutsche Telekom declined to comment.

(Reporting by Peter Maushagen, Frank Siebelt and Harro ten Wolde; Editing by Philipp Halstrick and Greg Mahlich)

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