BT said it will cut 13,000 jobs, primarily in back-office and middle-management roles, and will exit its London headquarters in an effort to downsize and evolve with the market. Gavin Patterson, BT’s chief executive, called the reorganization a “pivotal moment for BT,” on a fourth quarter fiscal 2018 earnings call with investors, according to the Seeking Alpha transcript.
Nearly two-thirds of the 13,000 cuts will occur in Britain. BT also said it plans to hire 6,000 engineers and front-line, customer-facing staff to support network deployment — primarily the roll out of fiber and 5G — and customer service.
Also on the earnings call, BT said it plans to build 4G to 95 percent coverage by 2020 and lead the 5G market with a commercial product launched sometime in the next 18 months.
In closing its London headquarters, BT will also move its headquarters to a smaller location within London. And the company will focus on 30 modernized sites for a more collaborative, open, and customer-focused culture.
BT Chairman Jan Petrus du Plessis said that the company’s long history in the telecommunications industry has “made us a very complex and sometimes slow-moving organization,” on the earnings call. The job cuts and business reorganization are a part of the company’s effort to transition away from “old” technologies to newer ones and lead the UK market in doing so. “Technology continues to evolve as we move from copper to fiber, from 4G to 5G, and from analog to digital,” he said.
The cuts are also the result of falling revenues and regulatory impacts, he added.
Company revenues in the fourth quarter fell 3 percent, year over year, to $8 billion. The company cited the regulatory environment as a reason for its problems, saying it had a $675 billion impact on BT over the past three years. BT also said that the expected impact over the coming three years could be greater than $1 billion.
It plans to offset these declines by reducing cash costs by $2 billion, including a nearly $1.1 billion payback over two years. Nearly $1.2 billion of the reduced costs will come from cutting labor costs.
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