Another 15,000 jobs to go at BT
One in ten to be shown door
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BT has cut 15,000 jobs this year, and will lay off another 15,000 people in the year ahead.
Problems at BT Global Services, which made a loss of £1.5bn on revenues of £2.1bn in the quarter, contributed to an overall loss before tax for the year of £134m for the whole group. BT expects revenue for the group to fall between 4 and 5 per cent in 2009/2010.
Ian Livingston, BT's chief executive, said: "Three out of four of BT's lines of business have performed well in spite of fierce competition and the global economic downturn. However this achievement has been overshadowed by the unacceptable performance of BT Global Services." Livingstone said BT had changed the management of Global Services and begun the restructuring process.
The company has cut 5,000 permanent positions and 10,000 temporary or indirect jobs in the last year. It expects to cut another 15,000 positions this year. Staff leaving costs fell 5 per cent to £1.3bn.
BT's board is proposing a final dividend for the year of 6.5p, compared to 15.8p last year.
It expects revenue to fall another 4 to 5 per cent in 2009/2010, but hopes to have cut costs by over £1bn.
BT is paying £525m a year into its pension pot for the next three years, to pay off its deficit.
BT's full figures are here.
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COMMENTS
@Tom
"similar to that of Transco and the National Grid. "
I think you'll fnd National Grid (running the electricity backbone of the UK) is now *part* of Transco, a division of Centrica.
But I think you're right. Splitting out long haul infrastructure or ideally a separate company (which National Grid was) does seem to focus investment and give a more level playing field. However this seems to have happened with BT, sort of. I know Wholesale supplies bulk services but is it Openreach that allows other suppliers usage of the local exchange?
Profit wise both of these areas seem to be doing well. The bottom line is historically BT laid a hell of a lot of cable to nearly every house in the land. AFAIK the last outfits to lay *independant* cable was the cable TV companies and it seems Virgin is only now putting in more, after about 8 years. While companies use BT cabling to take customer business off BT and BT exchange space to hold the kit they are going to use to make money off of it they should not expect to get that for free. How much they are *charged* however should be regulated.
Contrast this with the water companies. You cannot change supplier, no effective national transport and no seperation of the big long pipes from the local infrastructure. So you get Thames Water, who manage to leak as much water per day per household as they actually sell to a household. It seems BT are somewhere between the water companies level of "service" and the gas and electricity companies. How to move them to the gas/electricity level, rather than having them sink down down to the water companies, is tricky.
BT won't be calling in the receivers just yet
Operating profits
BT Retail £1227m, BT Wholesale £586m, BT Openreach £1247m BT Global Services
-£2041m
I'm no accountant but it looks like BT will have to go a *very* long way down to start worrying about the bailiffs just yet.
IIRC Global Services is the bit that does tries to operate abroad as well. It would appear that BT works best when its running an effective monopoly, which may or may not be being effectively regulated.
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