BT’s New UK CEO Allegedly Mulling Possibility of 25,000 Job Cuts
The new CEO of UK telecoms giant BT, Philip Jansen, is reported to be considering a huge reduction in jobs that could cut another 25,000 staff from their current workforce of nearly 100,000 (i.e. 82,500 direct employees and 12,300 contractors). Such a move might help to fund their roll-out of “full fibre” broadband ISP technology.
According to Bloomberg‘s sources within BT, the discussions are currently at a preliminary stage and BT’s plans may yet change. Similarly if the plan did proceed then BT probably wouldn’t announce it until after their annual results in May 2019, with the cuts then being made gradually over a 5 year period.
At this point it’s worth reminding readers that BT’s former CEO, Gavin Patterson, last year began a strategy to axe 13,000 jobs over 3 years (mainly back office and middle management roles), although they mitigated some of that by hiring thousands of new employees (here) to support network deployment (e.g. Openreach engineers) and customer service. So far BT has already made about a quarter of these cuts.
Patterson’s plan aimed to achieve a year 3 cash cost reduction of £1.5 billion with costs to achieve of £800 million and two year payback. By comparison the new plan could yield further annual savings of several hundred million pounds.
A Bloomberg Intelligence Spokesperson said:
“A bigger push on job cuts could yield extra annual savings of as much as 900 million pounds, in our view, boosting midterm Ebitda up to 10%. Reversing a negative earnings trend may help boost confidence in BT’s ability to invest in fibre and 5G, and still pay a growing dividend.”
Apparently the new cuts, if confirmed, would be balanced by accelerated automation of back-office processes, business disposals and a more streamlined management structure. As before this seems likely to benefit Openreach’s on-going work to deploy Fibre-to-the-Premises (FTTP) technology, which is currently in the process of hiring lots of new engineers in order to ramp-up its roll-out.
Openreach hopes to cover 3 million premises with FTTP by the end of 2020 (March 2021 financial) and then possibly 10 million by around 2025. Likewise their mobile division, EE, will also be making a significant investment to deploy the new generation of ultrafast 5G technology over the next 7 years or so.
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and Linkedin.
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Long overdue. BT need a CEO who’s balls have dropped and willing to make the shed choices.
If the business cannot support them numbers then it must slim
So 38,000 altogether? That’s a big number.
All large companies will have waste I’m sure. But surely loosing that amount of people will break things?
A very senior person once said to me his job was to find cuts of 10%/yr as the sort of large corps he ran managed to expand costs by almost that amount each year if left on their own.
Lots of dead wood still clinging on to their jobs. They need to get rid and make way for a new and willing to learn lot of employees.
I absolutely agree. Lots of ” old school” employees, and individuals in non substantive roles clinging on.
I’m sure that is the case. But 38k of them?
Just waiting to outsource departments, just follow the trail of the CEO’s from the last 20 years what were their pay offs ??
Dead wood or old school is what is missing in BT.. They have performance managed experience out of the business and are left with the purported ‘tech savy generation’ who actually have no brain cells and can’t think in the moment.
Our experience (old school/dead wood) actually has a significant, positive, impact with problems and resolution. Whereas the new staff simply transfer customers time and time again and it’s not unheard of where a customer has been on the phone for over 2 hours when all they had was a simply question, well simple to experience.
If the business wants rid of old school great, pay us out, BT will be left with a work force of utter morons.
Granted there are still too many ‘questionable’ managers (this work is used loosely), absolutely shocking what the business refers to as management, there are all those who can talk that talk, but simply can’t do the job from ground up, useless to be honest, and that’s at all levels, channel included.. One channel manager ‘I’m sick of advisers knowing more than me’.. Says it all really. However, if that’s what the business wants, have it, pay us out.
The City are looking for the long term plan from BT and that includes reducing cost. Post Office Telephones once employed 250,000 people. BT was hit hard last year with pension deficit payments and will again this year. From 2020 they should become more manageable. BT needs to release up more money to invest without increasing debt further. BT needs money for the forthcoming 5g auctions which reduces availability for FTTP.
Buying EE showed the way regarding revenue vs people. BT’s achilles is their legacy network and complex IT systems. BT is consolidating all the time but the ability to turn off old systems and hence release people still needs to be done whilst maintaining revenues.
We have already seen some rebalancing in OR resource but there is still much for OR to do regarding systems and BT have yet to fully integrate their acquisitions.
One of the key areas for BT will be the replacement of the PSTN, the consolidation of all their voice platforms, increased centralisation of equipment and selling off of property. There are many approaches that they can take but not all dependancies are in BT’s direct control. For instance it would be beneficial to both OR and BT if they could simply blitz exchange by exchange from copper to fibre but things aren’t that simple any more.
If ofcom would let them that would be ideal.
I was sacked by BT (or more forced out)after 27 years however thanks to me seeing light at the end of the tunnel I now work for a fibre broadband ISP who already offer FTTH and now offering upto 1GB to homes PLUS 10GB to business. BT are too slow relying on getting as much bandwidth out of copper to no avail .. get with the programme or get under the covers…
BT/Openreach “already offer” FTTP too. Aren’t they still the biggest deployment to date?
don Ansell — bitt i think it the word you mean — probably not sacked sacked / forced out (clafiy (sacked no pay) or offered 2 years money to go so not sacked at all (and proably a C scheme Pension salary of about 20k a year when you retire !!!!! — . – so you work for a altnet –or another fibre company lucky you ,
you clearly don’t understand that Openreach cannot just switch off the copper just like that . there are significant provider who required / demand only consume copper and LLU. they have to be supported — not can openreach force a subscriber to fibre by degrading the ADSL
Get rid of me and give two years money