BT to axe 13,000 jobs - despite announcing £2.6 billion profits

Thursday, 10th May 2018, 11:19 am
Updated Thursday, 10th May 2018, 12:19 pm

BT has announced that it is to axe around 13,000 jobs as part of a cost-cutting drive - with two thirds of the cuts set fall on UK staff.

Remaining staff cuts are expected to impact upon the telecoms giant's operations abroad.

BT said the job losses would mainly affect back office and middle management roles.

Plans were also revealed to exit the BT headquarters in central London, though another site in the capital is expected to house its head office.

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The move comes as BT looks to cut costs by around £1.5 billion by the final year of its three-year plan.

BT said the move out of its current London HQ formed part of a plan to cut the number of locations it owns across the UK.

The company said that about 80% of its staff were based in around 50 offices across the UK. That number will be cut to 30 “modern, strategic sites to create a more collaborative, open and customer-focused working culture”.

The telecoms firm added that it would be hiring around 6,000 new employees "to support network deployment and customer service".

BT has around 106,400 employees globally, with 82,800 in the UK.

The FTSE 100 firm saw its shares tank on the news, falling as much as 8.8% at the start of trading.

The announcement comes nearly a year after the company said it was to axe 4,000 jobs as part of a restructuring of its Global Services unit.

'Decisions like this are not easy'

BT chief executive Gavin Patterson said: "Decisions like this are not easy."

"We recognise that it is going to affect a lot of people, but ultimately we need to do these things to ensure that we remain a competitive business going forward and that we can benchmark our performance against peer companies," he told reporters.

He added that it was the "right thing for the business" and helps take BT "into its next chapter".

BT explained on Thursday that it was making moves to simplify its operating model by "de-layering" its management structure and ensuring there are "fewer, bigger, more accountable leadership roles".

It was also trying to improve productivity across its core UK operations, including "process simplification and automation to reduce costs".

'Devastating blow'

Philippa Childs, national secretary of the Prospect union, said the scale of the job cuts will come as a "devastating blow" to the managers and professionals it represents at BT.

"Many of the roles that BT is proposing to cut are highly skilled professionals and the loss of that expertise could impact BT's research and innovation capability," she said.

"We are also concerned that cutting such a large number of roles will inevitably impact those who remain in BT and could lead to work being pushed down to employees in lower grades."

The strategic update came as BT released its full-year results which showed a 1% drop in revenue to £23.7 billion, while reported pre-tax profits rose 11% to £2.6 billion.

It booked a £241 million restructuring charge over the period, when it cut more than 2,800 roles mainly across managerial and back office staff.

BT said the move helped achieve £180 million in savings for the year.

The company also spent around £22 million on professional costs relating to the investigation into its Italian business.

The company has been dealing with the aftermath of an accounting scandal at its Italian division, which resulted in a £530 million write-down and a major fall in its share price last year.