Over 100,000 BT employees, including boss Ian Livingstone, have had their pay frozen as BT continues to target cost savings across the business, drawing renewed fire from the Communications Workers’ Union (CWU).
Andy Kerr, CWU deputy general secretary, branded the pay freeze “wholly unacceptable”.
“BT is still making substantial profits and a pay cut in those circumstances is an insult to staff. The CWU will be considering our formal response to BT's imposition of a pay freeze early next week,” said Kerr.
BT insisted the freeze was the right move to protect jobs at the communications leviathan, which has come under considerable pressure in the opening stages of the recession. It has already written off over £1bn as a result of worsening performance in its Global Services division, and is also facing a deficit in its pension fund of nearly £2bn.
The telco is also in the process of cutting 10,000 jobs, and like many others in the business has clamped down hard on contractors and temps.
In a letter to staff widely leaked to the media, BT said it had not taken the decision to freeze pay lightly, and pointed out that it had negotiated previous pay settlements in line with growth in the Retail Price Index, which is expected to turn negative this year.
Bonuses to senior management are also expected to be slashed dramatically, and in many cases “won’t be paid at all” said BT. Livingstone makes a base salary of £850,000 and stood to rake in an extra £6m if things had gone better.