BackBT to cut another 10,000 jobs: Report
BT to cut another 10,000 jobs: Report
PremiumLondon: British telecom giant BT is preparing to slash another 10,000 jobs and up to 60% cut in its dividend when it will announce its results next month, media reports say.
“The huge redundancy programme will be announced next month alongside a horrendous set of year-end figures that will include provisions of about 1.5 billion pound," the Sunday Times said adding that “the redundancies are in addition to the 10,000 job cuts made last year and will be spread around BT’s 160,000 workforce."
The report further said the dividend is likely to be cut by up to 60%, while profits will be further dented by a big contribution to address a pension deficit that will exceed £8 billion.
The results will mark one of the lowest points in BT’s history since it was privatised in 1984. The share price has crashed to 81 pence, valuing the telecoms company at £6.3 billion.
The results would also seriously damage the legacy of Ben Verwaayen, BT’s former chief executive, who left eight months ago and has since become chief executive at Alcatel-Lucent, the report added.
Another leading daily the Telegraph said, "The current management, chairman Sir Mike Rake and chief executive Ian Livingstone, is understood to be looking to get as much bad news as possible out of the way when they announce next month’s results. Some commentators are predicting the job cuts could go deeper than 10,000.“
The Sunday Times further added, “They intend to present a company that has a sustainable dividend policy, cash flow and profits that can be delivered at the same time as reducing a debt burden of £11 billion."
The new business plan will be built around conservative assumptions and draw a line under further provisions at Global Services, the Sunday Times said.
A large portion of the £1.5 billion of provisions, relate to contracts agreed during Verwaayen’s time at the Global Services division, which serves big, multinational customers.
“This division (Global Services), which was meant to be the group’s growth engine, is a financial disaster," the Sunday Times said.
BT’s remaining three divisions- retail, Openreach and wholesale- are performing at their best for five years.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
