BT to shed 10,000 jobs by March
Added (2008-Nov-13)
Telecoms giant BT says it expects to have cut 10,000 jobs by the end of March next year.
The cuts will mainly affect agency and contract staff, including offshore workers, the company said.
BT said it had already cut 4,000 jobs, with a further 6,000 to go by March from its global workforce of 160,000.
News of the cost cuts sent BT shares up 12% in early trade. The company said the job losses were not a "direct result" of the economic downturn.
"This is a reflection of the fact we have to become leaner," BT chief executive Ian Livingston said.
"We need to do it in good times and bad."
Many of the job losses will be in the UK, with about 4,000 core positions affected.
Mr Livingston said that he did not expect to make compulsory redundancies.
Investors upbeat
Figures released on Wednesday showed that the UK unemployment total reached an 11-year high of 1.82 million in the three months to September, as more firms cut jobs to cope with the economic slowdown.
However, BT's job losses, which will lead to lower costs, cheered investors.
BT shares were up 12%, or 13.5p, at 126p in morning trade on the London stock market.
"The group's marked intention to improve profitability could see another turn in investor sentiment, this time upwards," said Keith Bowman, equity analyst at Hargreaves Lansdown stockbrokers.
'Decisive action'
BT said that three of its four main business units were performing well, but said profits at its global services division "were simply not good enough".
"We are taking decisive action to put matters right," Mr Livingston said.
The firm said it had already replaced the head of the division.
The job losses come as the firm announced a 11% fall in pre-tax profit for the July to September quarter.
Pre-tax profits totalled £590m and the firm said revenue rose 4% to £5.3bn.
Last month, BT had warned that its global services division, which provides IT networks to multinational businesses, would report lower profits. Its shares fell nearly 20% on the news.
The company announced radical changes to its pension scheme this week, including an increase in the retirement age from 60 to 65 and breaking the link between final salaries and pension payments.
