BT shares fall on news of expected write-downs

BT shares took a hit this morning

BT shares were the FTSE100 Index's leading faller this morning – down four per cent – after reports of a huge impending write down on the value of contracts at its Global Services arm and a potential further 10,000 job cuts.

This write-down is thought to relate to 15 of BT's 17 biggest contracts, including millions on its work with the troubled £12.7bn NHS National Programme for IT (NPfIT).

And the telecoms group, which has already made 6,000 contractors redundant during the past few months, has introduced pay cuts of between 10 per cent and 30 per cent for workers in Global Services.

BT runs the London region of NPfIT, where work was completely stopped earlier this year for months after a go-live of systems at the Royal Free in Hampstead cost the hospital £10m.

The project has since resumed work, and BT has also recently won some lucrative deals to support eight hospitals in the southern region that are using the Cerner Millennium patient records software installed by Fujitsu, but these will not be enough to bolster profits.

Tough contracts have made the NHS scheme unprofitable for suppliers, with Accenture and Fujitsu already quitting.

BT will report its results next month.