Jobs will go as BT leaves ‘no stone unturned’ to save cash
BT has warned jobs will be lost after it increased its cost-cutting target by £500million to £3billion in order to maintain the pace of building its superfast broadband network.
At its interim results, chief executive Philip Jansen said that it would leave “no stone unturned” in order to find cost savings by cutting waste and duplication, as well as using technology to increase automation.
BT has already cut £1.7billion of costs and 15,000 jobs on Jansen’s watch.
During the first half, BT’s capital expenditure rose two per cent to £2.6billion.
Its energy costs rose £200million and it also saw increases to both its staff and financing costs.
As a result, it is looking for savings from across the group, with headcount to be reduced in a “controlled manner”, using attrition where possible.
Jansen said: “Given the current high inflationary environment, including significantly increased energy prices, we need to take additional action on our costs to maintain the cash flow needed to support our network investments.”
He also told analysts that BT would raise its prices next year by consumer price index inflation plus 3.9 per cent.
“The reason for that is very, very simple really, which is we are experiencing significant inflation,” he said.
“No one likes seeing prices go up. Unfortunately, in this environment they just have to go up because otherwise we can’t balance the books and fund the investment.”
BT’s revenues for the six months to September 30 were all but flat at £10.4billion. Pretax profits dropped 18 per cent to £831million. Its full fibre-to-the-premises broadband network has been rolled out to 8.8 million homes and businesses so far, with a further six million where building is under way.
The news follows the Bank of England’s prediction that the UK will be in recession for a record two years.
Earlier this week, 1,300 jobs were put at risk after convenience store group McColl announced the closure of 132 stores. Furniture retailer Made.com said it was to appoint PricewaterhouseCoopers as its administrator, threatening the jobs of 720.