BT to axe 12,000 more jobs
TELECOM: Final round of cuts at end of 'a demoralising tunnel'
Wednesday 10 May 1995
BT is to cut about 12,000 jobs over the next 18 months in the final round of its nation-wide redundancy schemes. The cuts are in addition to higher-than-expected losses of 16,500 in the year to 31 March, mainly from management.
The next wave of reductions, expected to be announced next week, will mean that BT has trimmed its workforce to around 120,000 from 244,000 in 1989. The cost to the company has already been about £2.4bn.
It is expected that job losses will continue at a local level, but the numbers going each year will be much smaller than has recently been the case. BT declined to comment on the latest 12,000 job cuts. One industry source said: "There is relief that we have seen the light at the end of a long and demoralising tunnel." City analysts expect BT to reveal a pre-tax profit of about £2.5bn to £2.6bn after redundancy charges in excess of £750m, compared with £2.8bn the previous year. The dividend is forecast to increase by about 6 per cent from last year's 16.7p, reflecting growth in underlying earnings.
News of further rationalisation will be welcomed by those in BT who believe the company has yet to reach the levels of productivity it needs. In terms of number of lines it operates per employee - a key measure of efficiency - BT has 190 compared with 250 for the regional Bell operating companies in the US. Other European operators such as Telecom Italia and the Dutch PTT have between 200 to 250.
One City analyst said: "They have a way to go to achieve really world- class efficiency."
BT still has about 90 per cent of the overall telecommunications market, but its share of business segment has fallen to about 75 per cent. The company faces increasing competition from niche players including MFS and Colt in the City of London and from cable television companies.
BT is also likely to warn next week of the threat of increasing regulation from Oftel, the watchdog body. The company is already in the throes of an enquiry by the Monopolies and Mergers Commission because it refused to pay for introduction of number portability, which will allow customers to keep their numbers if they switch to another operator.
Oftel regards number portability as vital to competitiongrowth. BT fears it will shoulder a large part of the cost.
Oftel is also due this summer to publish results of a wide-ranging consultation on the future of the industry - including regulation of BT prices. It is thought that Don Cruickshank, director general of Oftel, is keen to abolish a cap which limits BT's line rentals to inflation plus two percentage points.
However, BT may also lose payments from other operators which help cover losses in the local networks of more than £1bn a year. The company also fears the regulator may take on more powers, allowing for more intrusion in its day-to-day operations than in the past.
- 2 Moscow voted the world's unfriendliest city
- 3 The excuses your boss is most likely to believe when you call in sick
- 4 I'm pansexual – here are the five biggest misconceptions about my sexuality
- 5 More than 11,000 Icelanders offer to house Syrian refugees to help European crisis
The excuses your boss is most likely to believe when you call in sick
Bono's group has made more money from Facebook investment than from all his music
Three-year-old ultra-Orthodox Jewish children told 'the non-Jews' are 'evil' in worksheet produced by London school
Wikipedia rocked by 'rogue editors' blackmail scam targeting small businesses and celebrities
More than 11,000 Icelanders offer to house Syrian refugees to help European crisis
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
If these extraordinarily powerful images of a dead Syrian child washed up on a beach don’t change Europe’s attitude to refugees, what will?
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
iJobs Money & Business
£14000 - £16000 per annum: Recruitment Genius: This company was established in...
£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...
£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...
Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...