Deutsche Telekom to trim IT service unit

As part of cost-cutting efforts, Deutsche Telekom aims to trim its IT service operations, particularly in Germany, but has no...

As part of cost-cutting efforts, Deutsche Telekom aims to trim its IT service operations, particularly in Germany, but has no plans to unload the unprofitable business.

T-Systems International, which provides IP, data and hosting services to corporations, plans to consolidate its offices in metropolitan areas and halve the number of its data centres, said chairman Christian Hufnagl. However, the unit will remain one of DT's four business pillars.

T-Systems plans to axe between 4,300 and 6,500 jobs in its 43,500 workforce. More than two-thirds of those job cuts will be in Germany.

A Deutsche Telekom spokesman said that T-Systems, like all units in the group, is under pressure to reduce operating costs, which includes job cuts.

Despite the cutbacks, T-Systems plans to establish a stronger presence in Asia and the US. "Our goal is to become the only real global player to come out of Europe," Hufnagl said.

T-Systems is competing against the likes of Electronic Data Systems, IBM, AT&T and WorldCom.

One area of business in which T-Systems aims to win more contracts is IT outsourcing, which accounts for 30% of the unit's revenue.

Deutsche Telekom confirmed it has reduced its 2002 group investments to €8.5bn (£5.4bn) from €9bn.

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