BT cuts 13,000 jobs to slash costs

Image copyright BT

BT would be to cut 13, 000 jobs more than three years, about 12% of its labor force, as it seeks to slim down the management and back-office roles.

The particular telecoms giant said that the job cuts and other actions would help it to reduce costs simply by £ 1 . 5bn.

It added that it would be employing about 6, 000 employees in order to “support network deployment and client service”.

A third from the job reductions will come from away from UK in its Global Services department.

Last year, BT has been forced to write down the value of the Italian language part of Global Services after an marketing scandal that cost the company more than £ 500m.

The company also said this intended to move out of its existing main London headquarters and into smaller sized premises.

BT forecast a fall in revenue of approximately 2% for the 2018-19 financial season. It also said it was keeping the full-year dividend unchanged from this past year at 15. 4p a reveal and would freeze it for your next two years.

Stocks in BT fell nearly 8% in early trading.

Philippa Childs, national secretary from the Prospect union, said the statement was “a devastating blow in order to managers and professionals represented simply by Prospect”.

She stated Prospect had been working closely along with BT on looking at the effect of organisational changes, but the amount of job cuts sounded “unrealistic”.

‘Lean and agile’

BT said it had been responding to changes in the telecoms market, which includes “increasing competitive intensity from set up companies and new entrants”.

“It is critical that BT transforms its operating model to construct a lean and agile company that delivers sustained improvement within customer experience and productivity, inch it said.

The particular announcements came as BT revealed that its annual pre-tax income rose 11% to £ second . 6bn in the year to Mar.

The firm furthermore announced a 13-year plan to connect its £ 11. 3bn monthly pension fund deficit, including regular obligations into the scheme and a bond problem.

Image copyright Reuters

Chief executive Gavin Patterson said BT was in a distinctive position: “We have the UK’s top fixed and mobile access systems, a portfolio of strong plus well segmented brands, and near strategic partnerships.

“This position of strength will allow us to build on the disciplined shipping and risk reduction of the final financial year, a period in which all of us delivered overall in line with our monetary and operational commitments whilst dealing with many uncertainties. ”

‘Challenging conditions’

George Salmon, equity analyst from Hargreaves Lansdown, said the job slashes and HQ move were “drastic actions”, but added that they “still aren’t going to be enough to drill down BT out the hole is actually in”.

“The dividend, which was rising 10% per year not so long ago, is set to deep freeze for the foreseeable future, and next year’s earnings look likely to fall again, inch he added.

“There are silver linings here and there. For instance , EE and the consumer businesses keep grow. However , these improvements are now being more than offset by challenging situations elsewhere.

“Openreach terms are getting tougher, and the business-to-business and global divisions are having the torrid time. Gavin Patterson may have his work cut out if your dog is to steady the ship. inch

Analysis: Rob Youthful, business reporter

BT’s share price has halved in the last two years. Investors have become less persuaded about the company’s ability to make them cash, after an accounting scandal, the profits warning and a regulatory great.

BT obviously thinks it has too many staff carrying out jobs not needed in the digital planet. Its wide-ranging corporate shake-up is definitely an attempt to simplify the business, to press more profit out of each lb it spends.

It’s under pressure to pump more money in to fibre optic and super-fast cellular networks and to fill the dark hole in its pension scheme. It offers made more efforts on those people fronts today.

Thousands of new hires will be technical engineers and cyber-experts, focusing not upon copper cables, but on constructing the physical and mobile systems of the future. It’s also trying to improve the customer service and mend relations using the regulator.

From the big job, turning a former monopoly into a consumer-focused TV and cell phone company. Shares are down dramatically, suggesting investors are yet to become convinced by BT’s plan.

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