BT slashes 10,000 jobs as profits tumble

Telecoms giant announces fall in profits and replaces Global Services CEO

The BT cuts will be a mix of UK and overseas employees

BT has announced plans to cut 10,000 jobs following a second-quarter profit slump of 11 per cent.

The telecoms company said that 4,000 of the jobs have already been cut, and the remaining 6,000 will be made before March 2009.

The cuts follow Virgin Media's decision yesterday to axe 2,200 jobs, or around 15 per cent of its workforce, and an announcement that UK unemployment has reached an 11-year high.

BT chief executive Ian Livingston said during a financial results call that, although three out of four of BT's business units achieved their set sales targets, namely BT Retail, BT Wholesale and Openreach, the BT Global Services group performed poorly.

"Profits in BT Global Services are simply not good enough and we are taking decisive action to put matters right," he said. "We have appointed Hanif Lalani as the new chief executive and he will continue to grow the business while reducing the cost base."

It is understood that the BT cuts will be a mix of UK and overseas employees and will include agency staff, subcontractors and offshore staff.

The cutbacks are part of an ongoing restructuring that aims to reduce BT's reliance on third-party contracts, eliminate overlapping roles and reduce costs, claimed a BT spokesman.

"We want to cut back on dependence on contractor staff by around 12 per cent, and reduce the direct workforce by four to five per cent, by the end of the financial year in March 2009," he said.

BT claims that the cull does not indicate any substantial rearrangement of its offshoring arrangements, but the telco will not disclose a breakdown of the IT roles affected by the move nor the suppliers affected by the restructuring.

BT currently has around 110,000 employees in 170 countries, according to information on its web site.