Unions fear 5,000 job losses as BT lifts profits

British Telecom is set to axe a further 5,000 jobs, unions claimed last night as the company announced better-than-expected first-quarter profits.

The Communication Workers' Union said the jobs would go from BT's network and systems operation division, which employs 40,000, and described the cutbacks as "totally unacceptable".

A BT spokesman confirmed that the issue of job losses had been raised at a meeting earlier this week but said he did not know where the figure of 5,000 had come from. BT added that it was disappointed the union had chosen to make public, matters that had been discussed in private.

News of the job losses came as BT reported profits of pounds 881m between April and June, a 1.4 per cent increase on last year. It also announced that a review into the business of its US partner, MCI, had become much more wide-ranging than previously thought. Executives again refused to say whether they had the power to renegotiate the planned $20bn (pounds 12bn) merger. But BT faced renewed criticism from analysts over the level of its profit with one analyst accusing the company of "a blatant fiddle", by temporarily slashing redundancy costs.

Sir Peter Bonfield, BT's chief executive, said the review would include all aspects of MCI's operations and of the merger terms themselves. BT launched the investigation a fortnight ago after MCI plunged the merger into jeopardy with a shock profits warning.

The US long-distance operator said losses this year from its drive into local phone markets would reach $800m, double the level previously forecast. Sir Peter and BT's finance director, Robert Brace, have recently returned from a fact-finding trip to MCI's Washington headquarters.

"The review is a wide review of the situation. The market place is changing rapidly.... We are looking at all aspects of the deal," said Sir Peter. Figures this week added to MCI's woes by showing a slowdown in growth from its main long-distance operation.

Sir Peter reiterated MCI's comments this week that the review would conclude in "weeks rather than months" and possibly by the end of August. BT's big shareholders have demanded information much sooner.

But he would not be drawn on whether the merger agreement allowed BT to renegotiate the terms, short of pulling out altogether. "This is a complex agreement interpreted by lawyers," Sir Peter added.

Last night there was growing speculation among analysts that the merger terms included a secret clause specifically banning renegotiation on the grounds of a deterioration in MCI's local business. In a separate briefing Sir Peter would only say some clauses of the agreement were "not public" and BT "has not publicised them".

Sir Peter also appeared to distance BT from MCI's bullish attack on the local market given by US executives this week. He said the "mutual review" would decide whether this strategy, which would raise investment substantially, was right. "Do they spend more, do they spend less?" said Sir Peter.

Responding to growing criticism from UK shareholders, Sir Peter admitted the events had dented the board's credibility. Asked whether British executives would be forced to resign, he continued: "I am employed at the pleasure of the board and nobody is denying me that pleasure. But I'm not a quitter."

BT also ruled out raising its pounds 2bn special dividend of 35p a share, due in September before the merger goes ahead, as a way of reducing the price for MCI. Investors in the US group will be paid partly in BT shares, but their price would drop after the dividend has been paid.

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Voices
voicesBryony Beynon: This is something every woman can relate to
Arts and Entertainment
film

News
Mock the tweet: Ukip leader Nigel Farage and comedian Frankie Boyle
peopleIt was a polite exchange of words, as you can imagine
Arts and Entertainment
Steven, Ella Jade and Sarah in the boardroom
tv
Life and Style
fashion
Life and Style
Britons buy more than 30 million handsets each year, keeping them for an average of 18 months
tech
Arts and Entertainment
Benedict Cumberbatch is reported to be in final negotiations to play Doctor Strange for Marvel although the casting has not yet been confirmed
film
News
people
Arts and Entertainment
Alloysious Massaquoi, 'G' Hastings and Kayus Bankole of Young Fathers are the surprise winners of this year's Mercury Music Prize
musicThe surprise winners of the Mercury Prize – and a very brief acceptance speech
Arts and Entertainment
TV Presenters Ant McPartlin and Dec Donnelly. Winners of the 'Entertainment Programme' award for 'Ant and Dec's Saturday Night Takeaway'
musicAnt and Dec confirmed as hosts of next year's Brit Awards
Arts and Entertainment
Orson Welles made Citizen Kane at 25, and battled with Hollywood film studios thereafter
film
Life and Style
fashion

World Beard and Moustache Championships held last week

News
video
Arts and Entertainment
Copycat culture: the Chateau Zhang Laffitte in China, top, and the building which inspired it, in Paris, bottom
architectureReplicas of Western landmarks are springing up in unlikely places
Sport
Rolando Aarons watches as his effort finds the corner of the Manchester City goal to give Newcastle the lead
footballManchester City 0 Newcastle 2: Holders crash out on home turf
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

English Teacher

£100 - £125 per day: Randstad Education Chelmsford: English Teacher - Saffron ...

Primary Supply Teacher - Northants

£90 - £130 per day: Randstad Education Leicester: Primary School Supply Teache...

Maths Teacher

£21000 - £35000 per day: Randstad Education Chelmsford: Maths Teacher - Saffro...

Chemistry Teacher - Top School in Malaysia - January Start

£18000 - £20400 per annum + Accommodation, Flights, Medical Cover: Randstad Ed...

Day In a Page

Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities
‘A bit of a shock...’ Cambridge economist with Glasgow roots becomes Zambia’s acting President

‘A bit of a shock...’ Economist with Glasgow roots becomes Zambia’s acting President

Guy Scott's predecessor, Michael Sata, died in a London hospital this week after a lengthy illness
Fall of the Berlin Wall: History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War

Fall of the Berlin Wall

History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War
How to turn your mobile phone into easy money

Turn your mobile phone into easy money

There are 90 million unused mobiles in the UK, which would be worth £7bn if we cashed them in, says David Crookes
Independent writers remember their Saturday jobs:

Independent writers remember their Saturday jobs

"I have never regarded anything I have done in "the media" as a proper job"
Lyricist Richard Thomas shares his 11-step recipe for creating a hit West End musical

11-step recipe for creating a West End hit

Richard Thomas, the lyricist behind the Jerry Springer and Anna Nicole Smith operas, explains how Bob Dylan, 'Breaking Bad' and even Noam Chomsky inspired his songbook for the new musical 'Made in Dagenham'
Tonke Dragt's The Letter for the King has finally been translated into English ... 50 years on

Buried treasure: The Letter for the King

The coming-of-age tale about a boy and his mission to save a mythical kingdom has sold a million copies since it was written by an eccentric Dutchwoman in 1962. Yet until last year, no one had read it in English
Can instilling a sense of entrepreneurship in pupils have a positive effect on their learning?

The school that means business

Richard Garner heads to Lancashire, where developing the 'dragons' of the future is also helping one community academy to achieve its educational goals
10 best tablets

The world in your pocket: 10 best tablets

They’re thin, they’re light, you can use them for work on the move or keeping entertained
Lutz Pfannenstiel: The goalkeeper who gave up Bayern Munich for the Crazy Gang, Bradford and a whirlwind trawl across continents

Lutz Pfannenstiel interview

The goalkeeper who gave up Bayern Munich for the Crazy Gang, Bradford and a whirlwind trawl across continents
Pete Jenson: Popular Jürgen Klopp can reignite Borussia Dortmund’s season with visit to Bayern Munich

Pete Jenson's a Different League

Popular Klopp can reignite Dortmund’s season with visit to Bayern
John Cantlie video proves that Isis expects victory in Kobani

Cantlie video proves that Isis expects victory in Kobani

The use of the British hostage demonstrates once again the militants' skill and originality in conducting a propaganda war, says Patrick Cockburn
The killer instinct: The man who helps students spot potential murderers

The killer instinct

Phil Chalmers travels the US warning students how to spot possible future murderers, but can his contentious methods really stop the bloodshed?
Clothing the gap: A new exhibition celebrates women who stood apart from the fashion herd

Clothing the gap

A new exhibition celebrates women who stood apart from the fashion herd
Fall of the Berlin Wall: Goodbye to all that - the lost world beyond the Iron Curtain

The Fall of the Berlin Wall

Goodbye to all that - the lost world beyond the Iron Curtain