BT losing 35,000 staff this year

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The Independent Online
BT IS shedding about 35,000 jobs this year as staff flock to take advantage of voluntary severance schemes.

The telecommunications group also revealed yesterday that for the first time the volume of inland calls had fallen because of the recession.

The company, which made pounds 3bn last year, had planned to axe 20,000 jobs but has revised the figure to 29,000. With 4,000 jobs going through natural wastage and others cut through disposals, the overall figure is likely to reach 35,000, with more substantial cuts to come next year.

The accelerated staff cuts were revealed as BT announced a 28 per cent drop in pre-tax profits from pounds 825m to pounds 596m in the first quarter of the year. The fall was less than expected and was due partly to a pounds 120m loss on the sale of Mitel of Canada and redundancy costs.

But BT warned that it saw no end to recession and that the near-term prospects were uncertain. Turnover in the first quarter fell by 2.1 per cent to pounds 3.273bn from pounds 3.342bn a year earlier and earnings per share dipped by 37.5 per cent to 5.6p from 9p in the first three months of last year.

Inland call volumes fell by 1 per cent on a 12-month moving average, with turnover from inland calls down by 3.7 per cent to pounds 1.269bn.

Turnover from international calls fell by 8.4 per cent to pounds 435m. This was due mainly to a 9.6 per cent cut in prices of outgoing calls, forced on BT in September by the regulator, Oftel. Recession and competition also took their toll on sales of equipment, which declined by 5 per cent to pounds 249m.

Barry Romeril, finance director, said: 'The chances of growth in the economy this year are, we believe, remote. We are seeing negative volume growth on a 12- month moving average and a return to significant growth may be some way off.'

Mr Romeril refused to comment on the likelihood of BT being referred to the Monopolies and Mergers Commission if it cannot agree a new pricing package with Oftel. The company is in discussions with Oftel on a range of tough new proposals that include a price cap of inflation minus 7.5 percentage points on BT's basket of basic services. This compares with inflation minus 6.25 points under the current regime.

The issue is expected to be raised when BT today faces shareholders at its annual meeting in Birmingham. But the company said that it would not be rushed into a decision that would affect its operations for at least five years.

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