BT cuts 10 per cent of workforce
BT to cut 15,000 jobs
BT took total charges of £1.3bn as a result of the completion of contract and financial reviews in Global Services, as well as a further charge of £280m for restructuring it. The company expects further restructuring charges of approximately £420m over the next two financial years.
Ian Livingston, chief executive, said: “Three out of four of BT's lines of business have performed well in spite of fierce competition and the global economic downturn. However, this achievement has been overshadowed by the unacceptable performance of BT Global Services and the resulting charges we have taken.
“With a recovery programme for BT Global Services in place and our heightened focus on costs and customer service, we now want to accelerate our plans for our future networks. We will examine doubling the pace of the rollout of super-fast broadband next year within existing capital expenditure plans, bringing fibre-based services within the reach of more than a million homes and businesses and securing the jobs of 1000 BT people.”
Revenue growth for the quarter was 1 per cent, because of the impact of foreign exchange movements and the impact of acquisitions. Excluding these factors, underlying revenue decreased by 5 per cent.
The company has already cut its direct workforce by 5,000 and its indirect workforce by around 10,000, reducing overall headcount by 15,000 in the year.
“We expect further reductions of a similar level next year. We have sought to retain our permanent workforce through redeployment and retraining,” the company said.
The company is reviewing its operations to save costs, and plans to continue the rationalisation of its systems and networks, reducing the number of systems by a third and halving the number of global networks.
BT expects its revenue to fall by 4 per cent to 5 per cent in 2009/10, reflecting a continuation of the trends seen in the fourth quarter, the impact of lower mobile termination rates, and the cost of sorting out BT Global Services. It will also cut capital expenditure and operating costs by more than £1bn in 2009/10, bringing group capital expenditure to around £2.7bn.