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BT’s Gavin Patterson quits under shareholder pressure

Patterson’s resignation comes just weeks after he announced 13,000 redundancies across BT

BT CEO Gavin Patterson has announced he is to step down after five years at the top, as the organisation faces down a revolt among shareholders unhappy with his performance.

A former holder of Computer Weekly’s Most Influential Person in UK IT title, Patterson has been with BT for almost 15 years – 10 of them as a board member. He rose to the position of CEO of BT Retail before becoming group CEO in 2013, after his predecessor Ian Livingston left to become a government minister.

During his tenure at BT, Patterson steered the organisation through a gruelling Ofcom Market Review that ultimately resulted in the legal separation of BT from its network infrastructure business Openreach.

Patterson went on to kick-start the organisations’ realignment in favour of rolling out fibre-to-the-premises (FTTP) – also known as full-fibre – broadband as the service delivery network of choice, prior to which BT and Openreach had insisted on sweating their legacy copper assets to the alleged detriment of the UK’s digital economy.

He also oversaw the £12.5bn acquisition of EE, which saw BT re-enter the mobile market as an operator owner for the first time in 14 years, since it spun off its BT Cellnet business, which later became O2, in 2002.

Unfortunately, Patterson also presided over the ongoing problems at BT Global Services – the organisation’s IT services organisation that has long weighed heavily on the group’s bottom line – and the fall-out from a major accounting scandal at its Italian operation also damaged him, as did the widening deficit in BT’s pension plan.

This culminated in the May 2018 announcement that BT is to cut 13,000 jobs on top of a previously announced 4,000, as well as shutting down its City of London headquarters and embarking on a massive shake-up of its operating model.

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The subsequent revelation that BT paid Patterson £2.3m last year generated further negative PR, and at the start of June, it emerged that some BT shareholders were actively mobilising against him.

BT chairman Jan du Plessis said that while the board was generally supportive of the new strategy set out by Patterson and his team in May, given the reaction to it, both he and Patterson had now agreed only a leadership change could actually deliver on these plans.

BT said the board had already commenced a search to identify his successor, and expects to have a new head in place before Christmas 2018. The organisation’s shares jumped as a result.

“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,” said du Plessis. “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,” he said.

Patterson said: “I’ve been immensely proud of what we’ve achieved, in particular the transformation of the business in recent years with the launch of BT Sport, the purchase and integration of EE, and the agreement to create greater independence for Openreach.

“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 ultrafast broadband by the mid-2020s, have fundamentally repositioned the company,” he said. “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.”

Uncertainty for workers

Philippa Childs, national secretary of Prospect Union, which represents many of the BT staffers currently facing the chop, said: “Gavin Patterson’s announcement of his departure later this year leaves a void creating uncertainty for thousands of BT workers who are waiting to find out more details about recently announced restructuring plans.

“BT must act quickly to find a replacement who can put in place a vision for the company and is willing to work with staff and Prospect to minimise job losses,” she said.

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