Original URL: http://www.theregister.co.uk/2010/07/29/bt_q1/
BT layoffs boost profits
Braces for UK.gov cuts
Layoffs and cost-cutting at BT have boosted BT's first quarter net profits by a third to £284m.
However, revenues were four per cent down to £5bn, and CEO Ian Livingston said the firm is in talks with the government about how deep public spending cuts will affect it.
He described the results as "an acceptable start to the year".
The boost in profits was achieved mostly by an six per cent cut in operating costs, including trimming eight per cent from its labour costs. It averted a damaging strike during the quarter by agreeing an improved two-year pay deal with the Communication Workers Union.
"Despite the challenging environment, these financial results underpin our outlook for the full year," Livingston said.
Government work accounts for under 10 per cent of BT group revenues. Cable and Wireless, one of BT's main rivals, last week warned investors it also expects to suffer as a result of the public spending squeeze.
BT will lean on its millions of domestic subscribers with a 10 per cent hike in call charges. ®