Computerwoche interview with T-Systems CEO Al-Saleh: "We need to become ten percent more efficient every year, customers demand" – IDG – Media, Data and Services for the technology industry

Computerwoche interview with T-Systems CEO Al-Saleh: “Every year we have to become ten percent more efficient – that’s what our customers demand”

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Reorganization of the business structure / reduction of branches to 25 / Growth of two percent per annum targeted / Focus on sustainable and profitable business areas

Munich, August 28, 2018 – T-Systems CEO Adel Al-Saleh wants to respond to customer demands for more efficiency and leaner structures. In an interview with the online edition of the IT magazine “Computerwoche” he specified the plans for a comprehensive reorganization of the Telekom IT subsidiary. In addition to the adjustment of the business areas and the focus on future-oriented and lucrative areas, the reduction of the branches from currently more than 200 to 25 stands in the foreground for him. “We have to become ten percent more efficient every year,” Al-Saleh explains to Computerwoche. “Today, 90 percent of our employees work at 22 locations, but in total we have around 230 office locations in over 100 cities. That is not efficient. “Even with a reduced number of branches, the required customer proximity can be achieved. However, not only smaller branches would be closed, the selection would be based purely on efficiency criteria. In addition to the closure of offices, the redistribution of staff and job cuts in a five-digit scale are planned.

Despite the lack of specialists in the growth area of ​​digitization, T-Systems wants to do without around 10,000 jobs. These should in particular be omitted in management as well as in the service and personnel area. The aim is to maximize the redistribution of the affected workforce to other parts of the Group. However, Al-Saleh also says that about one-third of the employees who should go do not have the required knowledge for the jobs in question. They understand the IT systems too little, often could not program and his not able to look after the systems.

In the business areas of T-Systems, the new CEO wants to move away from classic IT outsourcing and towards dynamic cloud platforms and private clouds. Another challenge is that T-Systems generated three-digit million sales with a few major customers. However, with the optimization of customer IT systems and the resulting drop in IT costs, T-Systems is cutting its own revenue. Al-Saleh wants to compensate for this revenue by offering new services. There were also significant problems with some large managed services infrastructure contracts.

A business segment with growth potential is the Classified Business, said the T-Systems boss of the “Computer Week”. In the business with the Federal Government, national and some EU authorities, he aims at growth rates of two to four percent, in the newly built IoT environment rates of 20 to 30 percent and in the security sector four to five percent. Al-Saleh: “In this country, we are already the largest provider (in the security sector), but our ambition goes further: We want to become the largest security player in Europe.” Growth star, however, is the public cloud business with about 30 percent and also at the Digital Solutions would be seven to ten percent feasible if there were enough skilled workers with digitization know-how available on the job market.

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