British telecommunications and television group BT announced on Thursday that it would shed up to 55,000 jobs by the end of the decade in a bid to bring down the cost of recent tech job cuts.
The layoffs, which make up 42 per cent of BT’s workforce, come two days after the UK mobile giant Vodafone announced plans to cut 11,000 jobs, or a tenth of its workforce, over three years.
BT employs 130,000 people, including contractors. The group will reduce this number to 75,000 to 90,000 people in the next five to seven years, it said in a earnings release.
The grim news follows tens of thousands of job losses in the global tech sector this year, including from Facebook parent Metaas rising inflation weakens the global economy.
BT is making further cuts after cutting costs as part of a plan put in place three years ago.
“By the late 2020s, BT Group will be relying on a much smaller workforce and a significantly reduced cost base,” said Chief Executive Officer Philip Jansen.
The company is “in an exceptional macroeconomic environment,” he added in a earnings release.
The leaner group “will be a leaner company with a brighter future” and will “digitize the way we work and simplify our structure”.
BT said it once its full fiber broadband and 5G If the network were rolled out, fewer people would be required to set it up and maintain it.
The company also announced on Thursday that net profit rose 50 percent to £1.9 billion (about Rs.19,816 crore) for the year ended March, but the performance was distorted by a one-off tax credit.
However, pre-tax profit fell 12 per cent year-on-year to £1.7 billion (approx. Rs. 17,476 crore) while sales fell 1 per cent to £20.7 billion (approx. Rs. 2,12,736 crore).
Meanwhile, investors fled after the news.
BT’s share price fell nearly 9 percent to 134.80 pence in morning trade in the rising London stock market.
“Headlines will no doubt focus on job cuts,” noted Matt Britzman, an analyst at Hargreaves Lansdown.
“It’s drastic, but given the rising costs and low margins in the overall business, it’s not too surprising.”
