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December 03, 2013

Deutsche Telekom Planning Layoffs in German T-Systems Division

Despite being a major global telecommunications provider, or maybe because of it, Deutsche Telekom has had trouble keeping costs down for the past year or two. Unfortunately, as is often the case, a lot of the time cost cutting measures involve layoffs and now is apparently one of those times. Deutsche Telekom is planning to cut as many as 6,000 jobs at its T-Systems IT division, according to Telecom Engine.

The layoffs would cut down the current T-Systems workforce in Germany -- which totals roughly 30,000 employees -- by about 20 percent with the aim of streamlining operations and making the IT business more competitive. Meanwhile, Deutsche Telekom is also said to be planning a restructure of some sort — an obvious move when planning to cut down one’s workforce — but the company has offered little in the way of details regarding this.

All that’s known definitely for now is that Deutsche Telekom will discuss its restructuring and layoff plans at its the T-Systems supervisory board meeting in January, as well as its own supervisory board meeting in December.

The Wall Street Journal reports that this potential round of layoffs would represent the first in Deutsche Telekom’s history. Obviously, union heads are saying they will oppose any such move.

The company’s T-Mobile brand in the U.S., on the other hand, is no stranger to layoffs. On the contrary, T-Mobile has enacted several rounds of layoffs since early 2012, with the most recent round taking place in March of this year.

As for T-Systems, it seems the division hasn’t been performing according to Deutsche Telekom’s expectations, namely in terms of its overall revenue, which has remained relatively flat this year compared to 2012 — despite the fact that profits have been up and margins improved. Here’s hoping that Deutsche Telekom is able to find an alternate way to improve T-Systems’ lot over the next couple of months.

Edited by Rory J. Thompson

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