UK telecom firm BT to slash up to 55,000 positions by 2030
The layoffs, comprising 42 per cent of BT’S workforce, come two days ater UK mobile phone giant Vodafone unveiled plans to cut 11,000 jobs or one-tenth of staff over three years
British telecoms group BT said on Thursday it will axe up to 55,000 jobs by the end of the decade in the latest tech jobs cull in response to rampant inflation.
The layoffs, comprising 42 per cent of BT’S workforce, come two days ater UK mobile phone giant Vodafone unveiled plans to cut 11,000 jobs or one tenth of staff over three years.
“Both have been struggling with the pressures of inflation, most notably from energy,” said Victoria Scholar, an analyst at Interactive Investor. Btemploys130,000staff,includingcontractors. The group will lower this to between 75,000 and 90,000 people over the next five to seven years, it said in a results statement.
The grim news follows the axing this year of tens of thousands of jobs across the global tech sector, including by Facebook parent Meta, as soaring inflation also saps the world economy.
BT is implementing further cutbacks, having already slashed costs under a plan launched three years ago.
“By the end of the 2020s, BT Group will rely on a much smaller workforce and a significantly reduced cost base,” said chief executive Philip Jansen.
Thecompanywas“navigatinganextraordinary macro-economic backdrop”, he added.
The slimmed-down group “will be a leaner business with a brighter future” and will “digitise the way we work and simplify our structure”.
BT said that once its full fibre broadband and 5G network was rolled out, it would not need as many staff to build and maintain it.
The firm also revealed Thursday that net profit soared 50 percent to £1.9 billion ($2.4 billion) in its fiscal year to March, but the performance was skewed by a one-off tax credit.
Pre-tax profit sank 12 percent to £1.7 billion from a year earlier, while revenue dipped one percent to £20.7 billion.
Sharesslump:investorstookflightfollowingnews of heavy cutbacks. BT’S share price sank almost nine percent in early morning deals on the rising London stock market.
It later stood at 138.95 pence, down 6.2 per cent from Tuesday’s close.
“Headlines will no doubt focus on the job cuts,” notedhargreaveslansdownanalystmatbritzman.
“It’s drastic, but it’s not overly surprising given the mounting costs and slim margins in the wider business.”
Aspartofanongoingoverhaul,thefirmannounced a tie-up last year for its pay-tv channel BT Sport.
Btandwarnerbros.discoveryagreedtocombine televised sport offerings in UK and Ireland.
The new joint venture, combining the assets of BT Sport and Eurosport UK, will launch later this year under the banner TNT Sports.
Themovewillmarktheendofthebtsportbrand, which was launched ten years ago and features costlycoverageofengland’spremierleaguefootball.
“The consolidation has the potential to create synergies,” noted Scholar.
Britzman said BT may be looking to eventually cash out.
“Likely the more important goal will be the slow disposal of the 50-percent stake BT holds in the joint venture; options are in place for Warner Bros to buy portions of BT’S stake over the first four years,” he told AFP.
Meanwhile, Sterling was falling back towards a three-week low against the dollar on Thursday, as investors remained cautious ater the pound’s recent rally, with the economy stagnating and the labour market sotening.
Data on Tuesday showed Britain’s jobless rate rose to 3.9% in the three months to March, while basic pay increased 6.7%, below expectations in a Reuters poll.
“You have persistently high core inflation, very slow growth and a sotening labour market,” said Traderxstrategistmichaelbrown.“thingsdon’tlook great at the moment so it’s perhaps no surprise to see sterling lower.”
The pound was last down 0.4% against a broadly stronger dollar to $1.2435. On Wednesday it hit a three-week low of $1.2422.
The dollar has benefited from optimism around the debt ceiling, with US President Joe Biden and senior congressional Republican Kevin Mccarthy underscoring their determination to reach a deal to raise the $31.4 trillion debt limit and avoid an unthinkable default.
High beta currencies - ones that tend to be more volatile - such as the pound, could benefit on a debt ceiling resolution, Traderx’s Brown added.
“Potentially if you see equities rally a litle more this could be supportive of the pound, but there are other currencies I’d rather get exposure to that through, such as the Aussie and Kiwi dollars.”
Stocks across the globe rallied on Wednesday and Thursday as traders bet that the U.S. would avoid a default.
Eyes were also on Westminster where Bank of England officials were providing testimony in front of parliament’s Treasury Select Commitee.
Bankofenglanddeputygovernordaveramsden toldthecommiteethattherateatwhichthecentral bank reduces its holding of government bonds was more likely to increase than decrease, as it unwinds its quantitative easing programme. The euro was up 0.2% against sterling to 86.94 pence.