BT cuts nearly 8,000 jobs as part of cost-saving program

BT has cut almost 8,000 jobs since the end of March as part of a sweeping cost-reduction program. The telecoms group reported that its workforce, excluding staff in its international business, has fallen by 7,731 to 90,000 people. This is a decrease from approximately 130,000 workers, including contractors, two years ago.

Workforce and restructuring

Most of the job cuts have occurred at BT’s Openreach division, which the company says is scaling back resources after reaching the peak of its nationwide fibre broadband construction programme.

BT expects its overall workforce, including the international operation due to be separated, to fall to about 75,000 by 2030. When excluding the international business, the company expects to employ between 65,000 and 70,000 people. In 2023, the company stated that the introduction of AI across its business could result in the elimination of the equivalent of about 10,000 roles.

Financial performance and acquisitions

The cost-cutting measures contributed to a 12% year-on-year increase in pre-tax profit, reaching £1.1bn for the six months ending in September. Following these results, BT shares rose by as much as 6% in early trading on Thursday, touching a five-year high.

BT also recently completed a £400m takeover of TalkTalk. The acquisition secured telecommunications supply to 2.5m households and public sector customers, including schools and hospitals, and protected the jobs of approximately 900 TalkTalk employees.

Regarding the TalkTalk deal, CEO Allison Kirkby said on Thursday she was unable to provide details on plans for the business because the deal is still under regulatory review. The transaction is being assessed following a Public Interest Intervention Notice issued by Culture Secretary Lisa Nandy, which prompted a fast-track investigation by the Competition and Markets Authority.

Savings targets

BT has adjusted its savings targets as it moves toward a joint venture with the US telecoms company Verizon to spin out its international business.

• According to London Business News, the annual cost-savings target has been adjusted to about £3.5bn from £3.7bn previously.
• The Guardian reports that Kirkby previously stated BT would raise its savings target from £3bn by 2029 to £3.7bn by 2030.
• Kirkby stated on Thursday, “Our UK-centric strategy and transformation is clearly delivering with £312 million of annualised savings achieved in the first half, as we continue to simplify and modernise.”

Why it matters

BT's restructuring highlights a significant shift in the UK telecommunications landscape as the company reduces its headcount while simultaneously expanding through acquisitions and transitioning its international operations into a joint venture.

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Sources

• theguardian.com: BT cuts almost 8,000 jobs amid sweeping cost-saving programme | BT | The Guardian
• londonlovesbusiness.com: BT cuts almost 8,000 jobs as cost-cutting drive boosts profits - London Business News | Londonlovesbusiness.com

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.