BT shares fell sharply this morning on rumours that it is to cut another 10,000 jobs and take a massive hit on the cost of its NHS work.

The telco is preparing to cut 10,000 more jobs - alongside the 10,000 which have already gone. It will also use next month's results announcement to write £1.5bn off the value of ongoing contracts, mostly from its troubled Global Services business.

The telco is also cutting 60 per cent from dividend payments.

BT shares fell over five per cent in early trading but have now recovered. The company dismissed the reports in the Sundays as pure speculation.

Earlier this year BT confirmed it was freezing wages for 100,000, and said in November that it would cut headcount by 10,000 by the end of March.

The company has just seen a big jump in its ability to do business in India, however - Tech Mahindra, which is one-third owned by BT, looks set to take over Satyam. ®

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