Partner Article

Job cut figures revealed

BT will reportedly reveal this week that it has cut 35,000 jobs as part of its battle to return to profitability.

According to reports, the former state-owned telecoms giant will tell investors it has exceeded its headcount reduction target by about 5,000.

The company had pledged to cut 15,000 jobs in the year to April on top of the 15,000 cut in 2008. It is understood the majority of the jobs were cut in the UK, although many were agency and temporary staff rather than full-time BT employees.

Tony Chanmugam, BT’s finance director and a respected cost-cutter, is understood to be aiming for at least a further 5,000 job cuts this coming year. If it achieves these additional cuts, BT’s workforce will have fallen from 162,000 to 122,000.

The job cuts form a major part of cost efficiencies expected to total £2bn in the year to April. The news will come on Thursday when BT is expected to reveal full-year pre-tax profits of between £1bn and £1.1bn, compared with a £134m loss a year earlier. However, profits will still fall £1bn short of those achieved two years ago, before the company’s Global Services IT division spiralled out of control.

BT was forced to swallow writedowns of more than £1.6bn after executives admitted that they overestimated the profitability of key contracts, particularly those with the NHS and Thomson Reuters, the global financial data provider. The company has culled almost all the senior management at Global Services, including three chief executives in 15 months.

Ian Livingston, BT’s chief executive, will outline a plan to turn the disastrous IT division around, by focusing on fast-growing Indian and Chinese markets.

This was posted in Bdaily's Members' News section by Ruth Mitchell .