BT Wireless 'to axe 1,500 jobs'

Sir Peter Bonfield: Plans eventually to move to US

Up to 1,500 jobs are to go at BT Wireless when it is demerged from British Telecom later this year, a report has said.

BT Wireless, which in the UK runs BT Cellnet, is to announce the cuts next month in documents detailing the spin off, Sunday Business said.

Operations in Ireland and the Netherlands will suffer most of the cuts, set to be achieved through natural wastage and voluntary redundancy rather than wholesale lay-offs, the newspaper said.

The move, which would represent about 10% of the firm's workforce, would come as a further blow to a global tech sector digesting Monday's announcement of 19,000 job cuts at Toshiba.

'Speculation'

British Telecom, which employs 134,000 workers, dismissed the Sunday Business report as "speculation".

While the telecoms giant said in May that it would axe 5-6,000 posts, chiefs have yet to decide how the cuts will be divided within the group.

"There is no absolute figure," a spokesman told BBC News Online.

He also confirmed that the losses would be introduced without the need for enforced lay-offs.

"We have reduced our workforce by 5,000 a year over the last three years through natural wastage," the spokesman said.

BT has also dismissed as "bank holiday froth" a report in the Mail on Sunday newspaper that chief executive Sir Peter Bonfield is poised to step down.

If Sir Peter, who has long expressed desires to move eventually to the US, were to quit before the end of his contract at the end of next year, an £820,000 bonus and £120,000 in pensions contributions would be put at risk, the newspaper said.

Company revival

The BT Wireless spin off has been proposed among a series of measures designed to ensure British Telecom better exploits its potential, and return it to favour with investors.

The company in June hired corporate restructuring expert David Varney to oversee the BT Wireless demerger.

And BT has pursued a series of measures, including the disposals of stakes in foreign telecoms firms, a rights issue and property sales to cut a debt mountain thought at one point to have reached £30bn.

Besides BT Cellnet, BT Wireless subsidiaries include Viag in Germany, Telfort in the Netherlands and Esat Digifone in Ireland.