BT to cut 15,000 more jobs

Downturn graph

BT is to cut 15,000 jobs, 10 per cent of its workforce, following its first quarter results today showing a loss of 1.5 billion.

Although it is unclear how many of these will be in the UK, two thirds of BT's staff are based here.

The company also confirmed it had already shed 15,000 jobs in the past year which was 5,000 more than expected.

The losses occurred in the BT Global Services section of the company, which saw its chief executive, Franois Barrault step down in November last year after a negative trading update.

Ian Livingston, chief executive of the company, said in a statement: "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."

The revenue overall for the year actually rose by three per cent to over 21 million and the company confirmed it would be paying 525 million in pension contributions over the next three years but its dividend was cut from 15.8 pence down to just 6.5 pence.

Sir Mike Rake, chairman of BT, said: "This has been a challenging year in which BT has had to tackle some significant issues. I am confident that decisive action by management has addressed the underlying problems within BT Global Services and has laid the foundation for the group to deliver a significant improvement in performance in 2009/10 and the years to come."

Livingstone believes the company will "emerge from the recession a stronger company" but it is clear that it will have a weaker workforce.

Scott Morrison, research vice president at Gartner, said: "The 15,000 jobs to go are mainly among contractors, allowing BT to keep its promise of no compulsory redundancies among employees."

"The need for BT to continue down the line of automation and industrialisation of its portfolio is now more urgent, as it doesn't have the luxury of providing such a high-touch, bespoke relationship to all its large enterprise customers as was the case in the past."

He does however believe if BT can achieve this, the company will improve.

Jennifer Scott

Jennifer Scott is a former freelance journalist and currently political reporter for Sky News. She has a varied writing history, having started her career at Dennis Publishing, working in various roles across its business technology titles, including ITPro. Jennifer has specialised in a number of areas over the years and has produced a wealth of content for ITPro, focusing largely on data storage, networking, cloud computing, and telecommunications.

Most recently Jennifer has turned her skills to the political sphere and broadcast journalism, where she has worked for the BBC as a political reporter, before moving to Sky News.