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BT will move out of its central London headquarters and reduce its global headcount by about 12%, or 13,000, as the UK’s incumbent telecoms operator seeks to cut £1.5bn in costs over the next three years in a major strategy update.
The company said it would focus instead on “around 30 modern, strategic sites to create a more collaborative, open and customer-focused working culture”.
CEO Gavin Patterson stressed that BT would maintain some form of London headquarters and was looking at options for the disposal of the St Paul’s site. The 10-storey BT Centre, which was completed in 1985, sits on the site of the former Telegraph Office of the General Post Office (GPO), and was also the location of Marconi’s first public demonstration of wireless transmission in the 1890s. It has been home to BT and its predecessors in some form since the 1870s.
The redundancies are expected to hit mainly back-office and middle-management roles at BT, with about two-thirds of them expected to be in the UK. The job cuts will be partly rebalanced as BT seeks to recruit thousands of new frontline engineers for Openreach, its quasi-independent broadband network infrastructure business.
The firm, which is still reeling from the impact of a corruption scandal at its Italian services business, had previously announced the loss of 4,000 jobs from its troubled Global Services unit – which BT has been at pains to portray as really part of a transition to a “more focused, digital business”, according to Patterson.
Philippa Childs, national secretary at trade union Prospect, which represents many of BT’s UK workers, said the scale of the cuts was greater than had been speculated before the announcement.
She described it as a “devastating blow to managers and professionals represented by Prospect”.
“It is particularly disappointing as Prospect has been working closely with BT to ensure that the impact of organisational changes, including restructuring and reorganisation, have been thoroughly examined, but this number sounds unrealistic,” said Childs.
“BT staff at all levels work tirelessly to provide an excellent service to customers. Many of the roles that BT is proposing to cut are highly skilled professionals and the loss of that expertise could impact BT’s research and innovation capability. We are also concerned that cutting such a large number of roles will inevitably impact those who remain in BT and could lead to work being pushed down to employees in lower grades.”
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Patterson, meanwhile, said BT was “uniquely positioned” to lead in converged connectivity and services, moving forward.
“This position of strength will enable us to build on the disciplined delivery and risk reduction of the last financial year, a period during which we delivered overall in line with our financial and operational commitments, while addressing many uncertainties,” he said.
“I am really excited to be delivering the next stage of BT’s transformation and have put in place the team that will support me in achieving these objectives.”
At the same time, BT plans to take the opportunity to make major changes to its operating model. It will take steps to streamline its leadership into fewer, bigger, more accountable roles; simplify its processes and introduce more automation to improve productivity; accelerate the transformation of Global Services; and move from buying to strategic sourcing, consolidating spend across its current 18,000 suppliers.
The company made the announcement alongside its fourth-quarter earnings to 31 March 2018, which saw a 3% decline in revenues to £5.97bn – and a 1% fall to £23.72bn for the full-year period – while pre-tax profit for the quarter was up 98% to £872m – and up 11% to £2.62bn for the full year.