Feeds

Contractors fear more BT job cuts

'Corrective action' in face of £25m IT overspend

Top 5 reasons to deploy VMware with Tegile

Hundreds of IT contractors and agency staff working at BT face the chop as the monster telco looks to cut costs. The telco's IT budget is already £25m over budget and execs are now desperately trying to cut overheads and drive revenue to turnaround the deficit.

Some 250 contractors have already been told that they will no longer be needed from September. But this is understood to be only the first wave in a series of job cuts leaving contractors feeling unsettled about their future within the company.

At the same time, BT is looking to move some 2,300 permanent IT staff into customer-facing ICT activities by March 2006 potentially leaving a skills gap for supporting BT's own internal IT projects.

Insiders fear much of this internal work is to be offshored to countries such as India as the telco seeks to cut overheads.

A leaked document seen by The Register reveals that the telco is "committed to significantly reducing the amount that BT spends on IT" and notes that BT's IT division - OneIT - is "£25m adverse to budget".

In a bid to tackle this shortfall Al-Noor Ramji, CEO of BT OneIT, told workers that "we must act now - because failure is not an option".

He goes on: "The OneIT leadership team is putting in place immediate, corrective action to ensure we get back on track and accelerate our transformation."

A separate memo from the deputising director of Resource Management talks of "freeing up people through a combination of productivity and efficiency savings (doing the same work more efficiently with less people) and offshoring (doing the same work with lower cost people, typically in India)."

Insiders have told The Register that BT plans to reduce the number of IT contractors to zero by the end of the year with the work either to be taken up by BT employees or shipped overseas to countries such as India, although this is denied by BT.

"Hundreds more agency staff, many of whom accepted below-market rates in exchange for the relative security of working for BT, can expect dismissal notices later this year," one insider told us.

In a statement a spokesman for BT told us: "BT's 'OneIT' strategy is ensuring that BT has the IT structure, processes and people to support its ongoing transformation into a global networked IT services company.

"One element of the IT strategy is to refocus BT staff on to customer facing work that is currently fulfilled by contractors. With this in mind, BT recently released a couple of hundred IT contractors. At the same time, BT is working to offshore non-critical functions in order to achieve its efficiency goals." ®

Beginner's guide to SSL certificates

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
Vodafone to buy 140 Phones 4u stores from stricken retailer
887 jobs 'preserved' in the process, says administrator PwC
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.