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BT job cuts start to bite ahead of March deadline

And contractor rates cut

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BT contractors are continuing to leave the firm ahead of the end of March deadline.

The telco said in November that it would cut jobs by the end of March and that most of them would be contractors.

Mark Williamson's weekly internal BT newsletter addressed concerns about contractors leaving the company. The email, seen by The Register, said the reduction in numbers was causing concern not just for contractors "but also for us internally about the risk we are carrying".

The missive outlined an earlier meeting with Ian Livingstone and other chief executives which warned that the firm was heavily geared - it has a market cap of £7bn but total debts of £11bn - and noted the problems at BT Global Services.

The mail said:

Outside BT, business failures are up 30% in Q3 so that means we have fewer customers to go after and although Openreach are trading very well in Q3 they lost 250,000 lines – that’s the equivalent of losing line business of Edinburgh in 3 months. Although we maintained our broadband position by cutting charges we are now left with a £120M gap to fill by selling more. Finally the point was made that if you see a Virgin cabinet at the street side it is already powered up and cabled up for SFBB (Super Fast Broad Band) – ahead of us.

The mail was blunt about the urgency of cutting costs. "The contractors who currently work for us, in the main, add real value, work hard and deliver. Unfortunately, we can’t afford them – this goes back to Ian’s point about cash flow. It is difficult to get into a debate about value for money, and quite frankly, pretty pointless, if you can’t afford something.

"We have to cut costs to generate cash and then save that cash rather than spend it elsewhere and we have to take more risk – never being reckless but accepting that we can’t afford perfection – the key watchword in the year to come will be affordability."

Asked about the cuts and about rumours of remaining contractors having rates capped a BT spokeswoman said: "BT has for many years worked with its unions to avoid compulsory redundancies among its directly-employed people in the UK. In consultation with the unions, we are committed to retraining our own BT people to fill more roles that are currently carried out by agency or indirect staff.

"Most of the 10,000 roles we will lose this financial year will be agency or indirect staff and the terms on which they are employed are set by their employing agency, not BT." ®

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