BT slashes 13,000 jobs and quit London HQ to cut £1.5bn in costs
BT’s share price fell nearly 10 per cent this morning as the telecoms giant revealed plans to cut 13,000 jobs and quit its London headquarters as the telecoms giant looks to cut costs.
Posted by Times News on Thursday, 10th May 2018
Britain’s biggest telecoms operator, which announced 4,000 job cuts a year ago, said middle management and back-office roles would face the brunt of the cull.
The company also said it would hire about 6,000 front-line engineers, customer service and cybersecurity experts.
BT chief executive Gavin Patterson is under pressure from investors to improve the company’s stock performance, which has almost halved over the last two years.
The company has been reeling from an accounting scandal in Italy last year and has spent billions on buying football rights to attract customers to its pay-TV channels.
It also spent £12.5bn to buy mobile phone operator EE in 2016.
"Too long a bloated, lumbering beast, BT’s recognition that it must become a ’lean and agile’ organisation is long-overdue," said Lee Wild, head of equity strategy at Interactive Investor.
"It is both dramatic and far-reaching, yet both sensible and critical if the business is to compete with rivals who saw the future of a rapidly changing industry much quicker than BT."
The FTSE 100 company said the job cuts would enable it to reduce costs by £1.5bn.
It will also increase investment to about £3.7bn annually to focus on "ultrafast broadband and taking a lead in 5G".
The restructuring is expected to cost £800m.
"This plan will help BT become a leader in converged communications; continue to power the UK’s digital economy; and drive greater value for shareholders," the company said in a statement.
A third of the job losses will take place overseas.
Its headquarters near the London Stock Exchange will be closed, although it will still maintain a smaller presence in London at a yet to be decided location.
In response to the job cuts, Philippa Childs, the general secretary of the Prospect union, said: "The scale of these jobs cuts is higher than had been previously speculated on and come as a devastating blow to managers and professionals represented by Prospect.
"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."
BT pledged to plug a £11.3bn pension fund deficit with a £2.1bn payment by 2020. It will also issue a bond to cover an additional £2bn.
The latest job cuts and restructuring shake-up came as it delivered a 3% drop in fourth-quarter revenue to £5.96bn and 1% for the year to £23.7bn. Fourth-quarter core earnings rose 1% to £2bn.
Editor: Jimmy Michael