Gavin Patterson to leave BT following adverse shareholder reaction to cost-cutting plan

BT CEO Patterson to remain in charge until successor is appointed

BT CEO Gavin Patterson is to leave the company later this year following adverse shareholder reaction to his recent cost-cutting plan involving the loss of some 13,000 jobs.

Paterson has been at BT for 14 years, having been appointed CEO in 2013. However, his period in charge has been punctuated by a major accounting scandal in the company's Italian business that involved a write-off of £530 million and multi-million pound fines from Ofcom.

Paterson will step down later this year. BT has already started the search for his successor.

In a statement, Patterson identified the launch of BT Sport, acquisition and integration of mobile operator EE, and the Openreach agreement with Ofcom as the highlights of his five-year tenure as CEO.

He added: "That, combined with the critical expansion of our superfast broadband network to 27 million customers, and our stated ambition to reach 10 million homes with ultra-fast broadband by the mid-2020s have fundamentally repositioned the company. BT is a great business and with the new management team I've recently put in place, is I believe very well positioned to thrive in the future."

The decision to replace Patterson comes ahead of BT's annual general meeting, where investors were expected to express their dissatisfaction with the company's performance, according to CityAM.

Big investors are disappointed at the company's failure to hit revenue targets and the forecast of no growth in profit for the next couple of years.

Underlying these complaints are suggestions that the company is struggling against intense competition in both its core telecoms markets, as well as in IT services. It is also lumbered with a large pension deficit that needs to be dealt with.

In a statement, new chairman Jan de Plessis, who was appointed in November, implied that the board had lost confidence in Paterson's leadership.

"The broader reaction to our recent results announcement has… demonstrated to Gavin and me that there is a need for a change of leadership to deliver this strategy," du Plessis claimed in BT's statement.

He continued: "To that end a number of concrete initiatives have already been launched and Gavin's commitment to continue to lead the business during this transition phase will provide invaluable continuity.

"While BT is a very demanding business, with multiple stakeholders, we do have significant opportunities ahead of us. I am confident that, for the remainder of his term, Gavin and his senior management team will continue to display the energy required to deal with every dimension of the task at hand."