Wednesday , 15 August 2018
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BT job cuts reach 10,000 as it fights to rebuild investor confidence

Beleaguered telco BT is set to cut 6,000 jobs worldwide, bringing its total cuts over the past year to 10,000 employees, when added to the 4,000 cuts it announced last year.

The redundancies will affect almost six per cent of BT’s 98,000-strong workforce, as the company sets out to rebuild investor confidence following a shaky 2017, marred by the Italian accounting scandal and a 42 per cent fall in profits.

CEO Gavin Patterson will formally announce the job losses during BT’s financial results on Thursday next week.

Analysts expect that the telco will save about £500 million on its annual £4.7 billion wage bill by axing the 6,000 employees. There is no indication yet which departments or regions will be affected by the cuts, although half of the earlier 4,000 losses, which were expected to save £300 million, were in the UK.

Hannah Maundrell, Editor in Chief of money.co.uk, said:

“These rumours are undoubtedly very distressing for employees of BT and their families. Those who fear they will lose their jobs should hope for the best but prepare for the worst. Now is the time to check what redundancy rights you have and dig out any income or mortgage protection policies you hold just in case.”

Patterson lost his expected £3 million bonus last year due to the Italian accounting shock, although that looks like small change compared to the £225 million that the company had to pay to shareholders due to the effects of the irregularities. The scandal cost the company £530 million in losses, and forced a profit warning.

BT was also 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. Ofcom has been working to break the BT/Openreach monopoly on fibre access for several years.

Openreach is currently on a massive recruitment drive, as it attempts to speed up the UK’s fibre rollout. The subsidiary plans to reach 3 million homes and businesses by 2020.

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