Deutsche Telekom confirms shift to low-pay nations
( dpa )- German telephones giant Deutsche Telekom said Wednesday it would slash 3,000 to 4,000 jobs annually in its business-client operations and shift work offshore to low-cost nations.
Reinhard Clemens, chief executive of its T-Systems division, said the shift offshore involved the Systems Integration (SI) section of his division employing 15,000 people. A few weeks ago, SI entered a strategic alliance with Indian-based group Cognizant.
The earlier announcement said Cognizant, which has its head office near New York but has most of its operations in India, would take over Telekom's Indian workforce. Cognizant welcomed the access it would gain to conservative German business customers.
T-Systems provides phone services to corporate clients. SI assists them to get new software up and running.
Clemens told investment analysts that some of the continuing cuts in the overall T-Systems payroll, currently 57,000, would come about through disposals of non-core businesses.
Telekom shares dived 12 per cent Wednesday to less than 10 euros, their lowest since March 2003, after another division, T-Home, warned that its private-client business would continue to shrink, but at a slower rate.
Private-user sales declined last year by 8 per cent. An executive predicted T-Home sales and earnings would stabilize in 2010.