Friday 18 August 2017

BT to slash 4,000 jobs after accounting scandal and profit warning

Josie Cox

Telecoms giant BT has announced that it is slashing 4,000 jobs over the next two years, as it struggles to recover from an accounting scandal, profit warning and navigate general market pressures.

The group said that most of the roles would be cut from managerial and back office, as part of a process designed to “clarify accountabilities, remove duplication and improve efficiencies”.

“The cost savings will provide headroom to offset market and regulatory pressures, and support increased investment in delivering great customer experience and leading networks,” BT said.

Also on Thursday, BT posted fourth-quarter revenue of £6.12bn (€7.3bn), up 10pc, and adjusted earnings of £2.07bn (€2.5bn), up 2pc, which was roughly in line with forecasts, according to Reuters.

BT said that the restructuring, which would cover its Global Services unit, group functions and technology operations would cost around £300m.

“It’s been a pretty torrid time for BT management and shareholders of late and there is not a lot of good news in today’s full-year earnings report,” said Neil Wilson of ETX Capital.

The company has endured a turbulent few months.

In January, almost £8bn was wiped off BT’s market value in one day after it slashed its earnings forecasts and said that an accounting scandal in its Italian business had been far more severe than previously expected, also leading to the departure of BT’s Europe chief.

In March, BT was slapped with a record fine of £42m by regulator Ofcom and agreed to pay rivals as much as £300m, after it admitted to breaching rules by failing to compensate other operators over delays to installing Ethernet lines.

Separately on Thursday, BT said that chief executive Gavin Patterson and former group finance director Tony Chanmugam would not be receiving a bonus for the 2016/17 financial year.

The company said that it paid a final dividend of 10.55 pence for the year, up 10pc, but warned that dividend growth in 2017/18 would be lower than the 10pc previously anticipated.

Shares in the company closed 4.6pc lower on the London Stock Exchange on Thursday.

Independent News Service

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