BT jobs axe slashes profits
Sacking 5,000 people is expensive, y'know
BT's second quarter profits have been spanked 29 per cent by its cull of middle management and accompanying restructure, the firm revealed today.
In the three months to 30 September, BT's net income was £435m, down from from £629m a year ago. Pre-tax, and not including the outlay on job cuts and other reorganisation charges, profits were down one per cent to £660m.
Revenues were up three per cent year-on-year to £5.1bn, with "new wave" IP-based services across the group making up for a one per cent slide in BT's traditional business.
The sales increase didn't have quite the effect it could have on the bottom line, because of the cost of the redundancy programme, however. About 2,000 white collar workers have voluntarily headed for the door so far, and chief exec Ben Verwaayen wants 3,000 more to go. BT has said the total cost of the cuts will be $450m, and that it will be repayed by savings in two to three years.
Predictions of an end to big net additions in broadband once again proved premature. BT Retail attracted 178,000 net new punters, making it the only provider with more than four million lines. It's IPTV product BT Vision has about 60,000 customers, which BT said is "in line with plans".
The strongest performing market for BT was big enterprise, where revenues were boosted seven per cent to £1.83bn. Consumers and smaller business both delivered a three per cent revenue increase.
The consumer business growth was the first in four years, which BT attributed to recent price cuts in response to the cheaper offerings of new LLU entrants.
At time of writing BT stock was trading more than three per cent down on the results.
Company earnings statement fanciers should visit BT here.®