BT is set to announce about 6,000 job cuts worldwide as the embattled telecoms company looks to rebuild investor confidence after a torrid 18 months blighted by the Italian accounting scandal and patchy financial performance.
The company is expected to announce the cuts, which amount to about 6% of its 98,000 global workforce, as part of a new corporate strategy to be unveiled by its chief executive, Gavin Patterson, at BT’s annual financial results next Thursday.
The latest round of cuts, which are expected to affect managerial and back-office personnel, will mean BT will have shed 10,000 jobs in the last year.
The cuts, ,which were first reported by the Financial Times are estimated by analysts to ultimately save BT about £500m from its £4.7bn annual wage bill. BT declined to comment.
Patterson, whose pay package fell by 4m pounds after the Italian accounting scandal destroyed his chances of receiving a performance-based bonus, is seeking to rebuild investor confidence. BT’s share price has more than halved in the last two years, and is down a quarter compared with a year ago.
Last May, BT announced 4,000 jobs were to be axed, with about half coming from its UK operation. Those cuts were forecast to save about £300m over two years.
The cuts followed problems at BT’s global services division, which provides IT and communications services to clients ranging from the BBC to Bromley borough council, and the accounting scandal at its Italian business, which cost £530m to clean up.
While BT is in the process of cutting staff, its standalone subsidiary Openreach, which is responsible for building and managing most of the UK’s broadband infrastructure, is on a massive recruitment drive.
In February, Openreach said it intended to create more than 3,500 engineering jobs this year as part of a plan to speed up the rollout of fibre broadband and eliminate “not-spots” in cities and suburban areas.
Kicking off a drive to upgrade the UK to next-generation gigabit speed internet, Openreach said it would recruit and train the engineers in order to reach its new target of 3m homes and businesses by 2020.