BT mulls redundancies for a quarter of staff – report

BT is considering further redundancies to increase profitability at the firm, with 25,000 jobs, a quarter of its employees, reportedly under threat.

According to Bloomberg, the battle-weary telco is mulling over the plans as new CEO Phillip Jensen prepares for his first meaningful earnings call in May. The telco has not confirmed or denied the reports thus far.

Having taken over the business from Gavin Patterson in February, Jensen is currently in the unenviable position of turning the supertanker. BT has been under pressure in recent years, not only due to an industry where profitability is decreasing rapidly, but with increased competition and CAPEX demands from the government, none of the trends seem to be favouring BT.

Sources claim internal discussions have been taking place, setting a target headcount of 75,000. The redundancies will allow for greater automation of back-office roles, while the team is also considering business disposals and streamlining the management functions. The plan is reportedly to trim headcount down by 25,000 by 2023.

This is of course not the first time BT has discussed redundancies, with the team also announcing 13,000 cuts back in May. The first round of cuts accompanied efforts to overhaul BT’s supply chain as part of a wider restructuring process to make the business more agile and fit for the digital era. These cuts, should the rumours turn out to be true, would be seen as a continuation of this strategy.

As you can see from the graph below, BT is not in the healthiest position and could be viewed as bloated in comparison to other telcos throughout Europe.

Bloomberg Intelligence

Source: Bloomberg Intelligence

Jensen now has the unenviable role of ensuring BT is fit for purpose, both from a business and network perspective, as the demands of the digital era start to weigh heavy. Not only has BT got to fuel 5G deployment, fibre connectivity is being demanded by customers and the government. BT has seemingly been able to ignore some of these demands in by-gone years, but the emergence, and initial success, of alt-nets are providing stern competition.

Although investors are seemingly happy with the rumours, share price increased by 1.6% following the report, we’ll have to wait until May to get the full details. It is believed Jensen will unveil the next stage of BT’s transformation during the earnings call.

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