BT to axe 10,000

In the wake of its shock earnings warning earlier this month, UK telco BT has announced plans to axe 10,000 staff.

On Thursday, the carrier said EBITDA for the quarter to the end of September dropped 1 per cent year on year to £1.39bn, while revenues climbed 4 per cent year on year to £5.3bn.

Following the earlier warning, Ian Livingston, chief executive of BT, reiterated that three out of the four business units, BT Retail, BT Wholesale and Openreach are delivering on target, but profits at BT Global Services are disappointing.

Global Services profits for the quarter slipped from £7m last year to a loss of £53m this year, while retail revenues were flat at £2.1bn and wholesale revenues were down 9 per cent at £860m.

As a result, the carrier plans to reduce its workforce by 10,000, with the majority of losses to take place among agencies, contractors, subcontractors and offshore workers.

European telecoms analyst and sector strategist at the Daiwa Institute of Research, Michael Kovacocy, said that whilst these cuts are not new news, “The clarity offered may help reduce scepticism in some corners as to whether the company could deliver on its previously announced plans. Furthermore, it should be noted that commentary to the effect that BT is open to additional, incremental headcount reduction should find a receptive audience in a market increasingly demanding strict cost-control from European telecommunications players.”