Thousands of people will lose their jobs as BT has announced a further £3billion in cost cuts over the coming years in a bid to save the struggling telecoms company.
Allison Kirkby, who took over as chief executive this year, said the company had hit its initial target of £3bn in savings a year before schedule, and said it would slash the same sum by 2029.
The news follows the drop in pre-tax profits by 31 per cent to £1.18bn last year. The fall was mainly down to a £488million accounting charge, while revenue rose one per cent to £20.8bn.
The FTSE 100 company said recent price increases for broadband customers, which have attracted criticism over the last year, had helped bolster revenues.
The group had already announced cuts of up to 42 per cent of the company’s 130,000-strong workforce by the end of the decade.
Kirkby said that despite the cost-cutting plan, there was “no change” to the company’s current jobs reduction target.
The jobs reductions market will remain unchanged amid further spending cuts
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Kirkby laid out her intention to double its “already-mammoth” efforts to reduce overheads.
The plan has already involved cutting 10,000 jobs, bringing BT’s headcount to 120,000 people.
The company is aiming to cut down their work force to have about 75,000 to 90,000 workers by 2030, as previously announced. This means up to 45,000 jobs are at risk so the company can hit their target.
They said that job cut plans would not change with the further £3bn in planned savings.
Instead, BT will focus more on the UK market, and ramp up efforts to digitise, simplify and “reskill” its workforce and business operations.
However, she did not rule out selling off some of BT’s international business arms, saying the company is “exploring a number of options for all of our international footprint”.
The company lost 491,000 Openreach customers in the 12 months ending March 31.
This was a two per cent decline in the broadband base due to weaker than expected growth.
BT has a 74 per cent share of broadband lines in the UK and had expected to lose customers each year but had also expected to pick up business from new homes being built.
Kirby said: “Last year housebuilding was minimal and broadband saw a slight decline because of the consumer squeeze.”
Based on the inflation figures announced in 2024, monthly prices for millions of broadband customers are increased by up to 8.8 per cent.
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Many broadband and mobile providers hike their prices each year to combat the inflation rate and rising business costs.
Some customers won’t be affected by these price rises because they’re with a provider that fixes their cost for the whole contract.
People on a broadband social tariff will also be exempt from these price rises.
Those claiming government financial support like Universal Credit or PIP, will likely be eligible for a discounted, no-price-rise deal.