BT’s recent channel shopping spree has come back to haunt itas the telecoms behemoth admitted that staff costs before leaver costsincreased by 2% to £1.32bn in the three months to the end of September.
BT splashed out on network services providers Basilica andLynx last year and picked up online IT dealer dabs.com in 2006.
It has now emerged that 10,000 BT employees - or 6% of thevendor’s global workforce - will be given their marching orders before theclose of its fiscal 2009 next March. The cuts will come largely amongcontractors, offshore workers and temp labour.
BT insisted the job cuts were symptomatic of wider economicills and unrelated to turmoil at its Global Services business, where a profitwarning last week saw unit head Francois Barrault fall on his own sword.
Chief executive Ian Livingston, who is facing down a majorfinancial crisis after barely four months in charge, said: “Profits in BTGlobal Services are simply not good enough and we are taking decisive action toput matters right. Demand for our services proposition remains strong and thepipeline is healthy. What we have to do now is translate revenue growth intobetter profitability.”
Across the board, group revenues were up 4% to just over£5.3bn, but pre-tax profits slumped 11% year-on-year to £590m, and BT GlobalServices posted an operating loss of £53m.
BT added that it is consulting with employees over itspension scheme and is considering cutting the final-salary link and ceasing tocontract out of the state second pension.