BT’s recent channel shopping spree has come back to haunt it as the telecoms behemoth admitted that staff costs before leaver costs increased by 2% to £1.32bn in the three months to the end of September.
BT splashed out on network services providers Basilica and Lynx last year and picked up online IT dealer dabs.com in 2006.
It has now emerged that 10,000 BT employees - or 6% of the vendor’s global workforce - will be given their marching orders before the close of its fiscal 2009 next March. The cuts will come largely among contractors, offshore workers and temp labour.
BT insisted the job cuts were symptomatic of wider economic ills and unrelated to turmoil at its Global Services business, where a profit warning last week saw unit head Francois Barrault fall on his own sword.
Chief executive Ian Livingston, who is facing down a major financial crisis after barely four months in charge, said: “Profits in BT Global Services are simply not good enough and we are taking decisive action to put matters right. Demand for our services proposition remains strong and the pipeline is healthy. What we have to do now is translate revenue growth into better 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 Global Services posted an operating loss of £53m.
BT added that it is consulting with employees over its pension scheme and is considering cutting the final-salary link and ceasing to contract out of the state second pension.