D Telekom's T-Systems to cut 3000 jobs by 2010

Deutsche Telekom's business client unit, T-Systems, has reached an agreement with labour representatives to shed 3,000 jobs by next year in an effort to cut costs, a T-Systems manager said.

T-Systems had almost 45,000 employees by the end of the second quarter, down 1.9 per cent from the previous year.

Matthias Schuster, head of personnel at T-Systems, said on Wednesday remaining staff could count on job guarantees until mid-2012.

T-Systems is Deutsche Telekom's smallest and least profitable unit. In 2008 it reported an adjusted core profit of 826 million euros ($1.17 billion) on sales of 9.34 billion euros. Deutsche Telekom 2008 core profit was 19.5 billion euros.

In the quarter ended June 30, T-Systems posted a 22.9 per cent increase in adjusted core profit thanks to cost-cuts and an asset disposal. Sales dropped 3.2 per cent.

T-Systems, which provides IT and telecoms services for businesses as well as for German federal and municipal governments and European public administrations, has been struggling with shrinking sales and low margins.

Last year, T-Systems entered an alliance with IT service provider Cognizant to boost its system integration business, which helps companies link information technology, devices and programs to share and exchange data and ultimately lower costs.