BT is to slash up to 42 per cent of its workforce by the end of the decade as the UK telecoms group embarks on its most radical cost-cutting since it was privatised in the 1980s.
The FTSE 100 group said on Thursday that it would cut between 40,000 and 55,000 jobs, including employees and third-party contractors, by 2030. The group’s current workforce totals 130,000, including around 30,000 third-party contractors which are mostly full-time posts.
Faced with rising costs and a series of underperforming businesses, BT had already embarked on a cost-cutting programme. The group said it had achieved £2.1bn in cost savings of a £3bn target.
The cuts will include 15,000 fibre engineers and 10,000 maintenance workers, a person close to the company said, with another 10,000 eliminated by increasing digitisation and automation across BT.
“New BT Group will be a leaner business with a brighter future,” said chief executive Philip Jansen, adding that many of those reductions would come from the end of the full fibre rollout that the group was “spending a fortune on now”.
“This is an existing plan, we’re just announcing it and giving people a flavour of the landing zone in five to seven years’ time,” he said.
“Whenever you get new technologies you can get big changes,” Jansen said of the jobs to be lost through digitisation and automation. “Generative AI . . . gives us confidence we can go even further.”
The Communication Workers Union, the biggest union representing BT workers, said that the job cuts did not come as a surprise.
“The introduction of new technologies across the company, along with the completion of the fibre infrastructure build replacing the copper network, was always going to result in less labour costs for the company in the coming years,” they said.
“We have made it categorically clear to BT that we want to retain as many direct labour jobs as possible and that any reduction should come from subcontractors in the first instance and natural attrition.”
However John Ferrett, a negotiator at Prospect, said the union was “deeply concerned by the scale of these cuts” and that it had demanded an urgent meeting with Jansen.
“Announcing such a huge reduction in this way will be very unsettling for workers who did so much to keep the country connected during the pandemic,” it said.
BT’s move to deepen its cost cutting came as the former monopoly reported a mixed set of annual results. While revenues and profits surpassed expectations, its free cash flow — a metric closely watched by investors — disappointed.
For the 12 months to the end of March, the group reported free cash flow of £1.3bn, at the lower end of the £1.3bn to £1.5bn range it had set out. BT said the figure for its current financial year was likely to be between £1bn and £1.2bn — below consensus estimates of £1.3bn — as its capital expenditure was likely to be higher than anticipated.
Shares in BT were down nearly 8 per cent in early trading on Thursday.
Full-year revenues at the group dipped 1 per cent to £20.7bn compared with a forecast of £20.5bn. Its adjusted earnings before interest, tax, depreciation and amortisation climbed 5 per cent to £7.9bn, bolstered by above-inflation price increases for contracts of some customers.