BT cutting 13,000 jobs
I hope everyone had a good bank holiday last weekend, we definitely had the weather for it. The team at EGB made the most of the sunny hot weather by having BBQs, going to the beach, visiting food festivals, and doing a bit of gardening. Let’s just hope that isn’t the last of the hot weather for this year.
This week for the blog, we are looking into the news that BT is to cut 13,000 jobs over the next three years to try and save money.
BT will be cutting down its workforce by around 12%, which is 13,000 jobs, a third of these being from outside the UK in its Global Services division. The cuts will come from reducing its management and back-office roles. Along with reducing jobs, BT headquarters will be moving to smaller premises after moving out of the existing headquarters building in Central London. These job cuts and other measures will help to save £1.5bn.
It didn’t help that back last year, BT’s Continental European operation resigned after years of inappropriate behaviour, writing down the value of the Italian unit by £530m, making BT’s shares plunge 21%. The investigation found improper accounting practices and “a complex set of improper sales, purchase, factoring and leasing transactions”.
BT forecasted a fall in revenue of about 2% for the 2018/2019 financial year. BT also said it was keeping its full-year dividend unchanged from last year at 15.4p a share and would freeze it for the next two years. George Salmon, equity analyst at Hargreaves Lansdown has said “The dividend, which was rising 10% a year not so long ago, is set to freeze for the foreseeable future, and next year’s profits look likely to fall again.”
BT have said “It was responding to changes in the telecoms market, including increasing competitive intensity from established companies and new entrants. It is critical that BT transforms its operating model to build a lean and agile organisation that delivers sustained improvement in customer experience and productivity.”
Chief Executive Gavin Patterson has said “BT was in a unique position, we have the UK’s leading fixed and mobile access networks, a portfolio of strong and well segmented brands, and close strategic partnerships. This position of strength will enable us to build on the disciplined delivery and risk reduction of the last financial year, a period in which we delivered overall in line with our financial and operational commitments whilst addressing many uncertainties.”
BT have made decisions to reduce costs by cutting jobs and relocating. Will this be enough to get the company back on track? Let us know what you think in the comments below.
Have a great weekend,