Published: Thu, May 10, 2018
Finance | By Claude Patterson

BT to axe 13000 jobs and leave London HQ in cost-cutting plan

BT to axe 13000 jobs and leave London HQ in cost-cutting plan

BT Group plc (LON:BT.) is cutting 13,000 managerial and back-office jobs and leaving its London headquarters as the UK's biggest telecoms group launches another restructuring.

The job cuts, the highest number by the former monopoly since 2008, will save 1.5 billion pounds in costs in three years, the company said.

BT also said it has agreed a new 13-year funding plan for its pension, which had a deficit of £11.3bn at the end of June, paying £2.1bn into the scheme by 2020 and a further £2bn will be funded by the issuance of bonds.

BT, which owns Britain's biggest mobile operator EE, said it would hire about 6,000 new engineers and front line customer service staff to support its roll out of fibre and 5G networks.

It comes as BT looks to cut costs by around £1.5 billion by the third year of its revamped strategic plan.

BT shares were trading 8.4% lower at 218.50 pence early Thursday, the worst faller in the FTSE 100 index.

BT had a total of 106,400 employees according to its most recent 2017 annual report.

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

"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. The plan will additionally see simplification of the company's management, increased automation for improving productivity, new digital products, and consolidation of its supplier base.

The announcement today coincided with the unveiling of the company's annual results for the year to the end of March, which revealed revenue down by one per cent for the year, but by three per cent for the final quarter.

"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.

"Our [new] strategy will drive sustainable growth in value by focusing on delivering differentiated customer experiences, investing in integrated network leadership, and transforming our operating model", Patterson added.

Plans to ditch its London headquarters were made in an effort to reduce inefficiencies that it said were created by being housed in numerous sites across the UK.

The new strategy from Chief Executive Gavin Patterson comes after the group reported a three per cent drop in fourth-quarter revenue to £5.967billion.

BT was also previous year hit by a £42 million fine from regulator Ofcom, plus a £300 million compensation bill, for its failings around "deemed consent" in its Openreach division.

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