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BT merges B2B operations to cut costs by £100 million per year

BT Tower framed by decorative lamp post

UK operator group BT is set to combine its Global and Enterprise units into a single B2B unit called BT Business.

The new combined unit will create a ‘simpler BT Group’, we’re told. BT’s combined business operations brought in pro-forma revenues of around £8.5 billion and EBITDA of over £2 billion this year, and the consolidation of this business into the single unit is expected to deliver at least £100 million of gross annualised savings by the end of 2025.

The firm previously announced it will aim to make £3 billion in gross annualised savings by that time across the group.

BT Business will be led by Bas Burger from January 1st, who is the current CEO of BT’s Global unit, and has been with BT since 2008. CEO of BT Enterprise, Rob Shuter will be leaving BT ’to step down from executive life and spend more time with family and on his personal interests.’ BT Business will commence reporting as a single unit from April 1st 2023.

We’re told with the creation of the new unit BT will ‘invest in the skills, technology and partnerships required to achieve its ambition of returning to growth and become the leading provider of secure multi-cloud connectivity.’ Though since the motivation appears to about ‘removing the current duplication between Enterprise and Global’, presumably reducing headcount is part of the plan.

“BT Group is a leading provider of B2B connectivity and related services to UK and multi-national corporations, government and public sector organisations worldwide, as well as UK SMEs and SoHos,” said BT Group Chief Executive Philip Jansen. “BT Enterprise is the market leader in the UK, with a market share of 30% underpinned by BT Group’s fixed and mobile network leadership, the strength of the BT brand, and national sales, service and distribution.

“BT Global serves many of the world’s largest companies and is consistently rated as a leader for its networking and security services and has ambition to be the leading provider of secure multi-cloud connectivity. By combining the two units, BT Business will bring the Group’s combined assets, products, capabilities and brand to the service of all of our 1.2m business customers who will benefit from faster innovation and delivery. Bas is an excellent leader and I’m confident he will build on the plans already underway and drive the combined business back to growth.”

The long and short of it seems to be BT has identified overlap between its two B2B units and that it thinks combining them into one and removing any overlap will yield some cost savings, which is one of its key aims for the medium term. This ties in with the rejig it did earlier in the year when it made EE its main consumer facing operation, which also seemed to be about preventing two parts of its own business directly competing with each other on the consumer side.

 

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