BT Plans to Cut Jobs to Boost Profitability

BT Plans to Cut Jobs to Boost Profitability

BT has announced plans to cut costs and boost profitability by significantly reducing the number of people working for the telecoms group. The company projects its “total labour resource” to be reduced from 130,000 to between 75,000 and 90,000 by the end of the decade under a “rolling plan”. This reduction affects both BT employees and third-party contractors. The company has not specified the number of direct employees who will be affected by the cuts, but it hopes the reduction can be achieved primarily through natural attrition instead of redundancy.

Chief executive Philip Jansen said that after completing its fibre roll-out and digitising its operations, BT would rely on a much smaller workforce and significantly reduced cost base by the end of the 2020s. He added that the “New BT Group will be a leaner business with a brighter future.”

Union Responds to BT’s Plans

The Communication Workers Union (CWU) launched a series of strikes over pay at BT last year until an agreement was reached in November. The union said that the announcement was “no surprise” as the introduction of new technologies and fibre infrastructure build replacing the copper network was expected to result in fewer labour costs for the company in the coming years. However, the union has made it clear that it wants to retain as many direct labour jobs as possible and that any reduction should come from sub-contractors in the first instance and natural attrition.

Last year, the company warned of major job losses as it struggled with the impact of soaring, energy-driven inflation. Despite this, the annual results met market expectations, with a 5% rise in full-year adjusted core earnings of £7.9bn – its first growth in six years. However, free cashflow in the year to March fell 5% to £1.3bn due to increased cash capital expenditure. As a result, shares opened 9% lower.

In conclusion, BT’s plans to reduce its workforce in the coming years are aimed at cutting costs and enhancing profitability. The reduction is expected to be achieved primarily through natural attrition, rather than redundancy. The Communication Workers Union has expressed its desire to retain as many direct labour jobs as possible.


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