T-Systems Strategy: Investing while saving

• Company aims to save 600 million euros in three years
• Substantial investments in growth planned
• Around 4,000 jobs to be relocated and 6,000 cut worldwide

Telekom board member and T-Systems CEO Adel Al-Saleh wants to put Deutsche Telekom's corporate customers division on a growth course. Savings in overhead costs, administration and management levels, will contribute to this. Investments in growth areas will form the core of the transformation program for the next three years. These include: the Internet of Things (IoT), Cloud, SAP, security, digital solutions, toll collection and services for the public sector.

"Our strategy is in place: We are aligning ourselves to eleven portfolio units, we have initiated four change initiatives and are now implementing the plans," explains Al-Saleh. "This will turn T-Systems into a digital service provider for our customers."

Saving 600 million euros, while investing up to 300 million into growing 

T-Systems intends to achieve gross savings of around EUR 600 million across all companies and local business units as a result of the transformation plan. Al-Saleh intends to reinvest up to 300 million euros into growing the company in areas like IoT, Cloud and security. "We will spend triple-digit millions per year on the growth areas," says Al-Saleh. "Because the transformation of the company must not jeopardize our success where we are strong." The financial targets announced at the recent Capital Markets Day for T-Systems and DTAG as a whole are supported by these initiatives and remain valid.

10,000 jobs worldwide affected

Creating an agile organization by eliminating bureaucracy and forming a digital service provider will affect around 10,000 jobs worldwide: around 4,000 jobs will be relocated and 6,000 will be reduced over three years. For example, sales and delivery organizations will be simplified and integrated, and non-customer-related activities will be scrutinized to required minimum levels. The management levels are to be reduced from eight to three levels (in large service delivery organizations there will be five levels). The result: four large scale delivery centers worldwide (in Germany, Slovakia, Hungary and a newly formed center in India). 

Transformation in Germany

Starting in the second half of 2018, approximately 2,000 jobs in Germany will be lost or relocated each year over the next three years. In the first year, the main focus is on overhead functions and management positions. In the second year, the focus will be on distributing delivery across the four large delivery centers. In the third year, more automation and digitization will enable further staff reduction in impacted areas. 

T-Systems has a disproportionate number of office locations in Germany compared to its size. "We have 230 office locations in 100 cities. Less than eight employees work at 50 of the sites. It's not efficient. We want to consolidate to less than 20 office locations. 90 percent of all employees work in 22 German locations today" explains Al-Saleh.

Profitable in three years

By 2021, the CEO wants to turn T-Systems into an economically successful company. "I want a digital service provider with over 30,000 attractive jobs worldwide," Al-Saleh outlines his goal. "We want to do this in a socially responsible way. Just as Telekom and T-Systems have done in the past." 

T-Systems currently employs around 37,000 people worldwide, 17,800 of them in Germany.

About Deutsche Telekom:  Company profile 
About T-Systems: T-Systems at a glance