BT announces further job cuts; reports 1Q net loss following writedown at Global Services unit

14 May 2009

‘Unacceptable performance’ from its Global Services division has once again prompted the UK’s BT Group to announce job cuts, with a further 15,000 staff expected to go, having previously announced it would reduce its headcount by 10,000 in November last year. The company noted that in the year to end-March 2009 it had in fact reduced the number of full time employees by around 5,000, with a further 10,000 indirect employees working through agencies or third party contractors cut.

The news comes on the back of the company posting its financial results for the three months ended 31 March 2008, with BT posting a net loss of GBP976 million (USD1.4 billion), down from a net profit of GBP426 million in the same period last year. The group noted that the loss was a direct result of a GBP1.3 billion charge incurred at its Global Services unit, of which GBP1.2 billion related to two major contracts. Earnings before interest, tax, depreciation and amortisation (EBITDA) before contract and financial review charges decreased 14% to GBP1.35 billion, again attributed to the performance of the Global Services unit.

Other group units fared better, however, with EBITDA growth in both BT Retail and Openreach, while in its Wholesale operations the rate of EBITDA decline continued to slow. In addition, group revenue for the three-month period rose 0.9% year-on-year to GBP5.47 billion, with favourable foreign exchange movements and the impact of acquisitions adding GBP257 million and GBP100 million respectively.

United Kingdom, BT Group (incl. Openreach)