Page last updated at 18:56 GMT, Thursday, 14 May 2009 19:56 UK

BT to shed a further 15,000 jobs

BT chief executive Ian Livingston: 'We have to reduce costs'

BT has said it will cut about 15,000 jobs this year, mostly in the UK, and has reported an annual loss of £134m.

The firm also said it had cut 15,000 jobs in the past year, which was 5,000 more than had been expected.

BT's woes centre on its global services unit, which handles the network systems of large firms. BT said it had taken a near £1.6bn charge at this unit.

BT said it would make £525m of pension contributions in each of the next three years to help cut the scheme's deficit.

BT's self-inflicted wounds aren't life threatening
Robert Peston, BBC business editor

It also cut its dividend sharply from 15.8 pence to 6.5p.

"Three out of four of BT's lines of business have performed well in spite of fierce competition and the global economic downturn," said BT chief executive Ian Livingston.

"However this achievement has been overshadowed by the unacceptable performance of BT Global Services and the resulting charges we have taken."

BBC business editor Robert Peston said the main problem at BT's global services division - whose customers include Microsoft, Reuters and the NHS - "is that costs have spiralled out of control".

Telecoms analyst Eddie Murphy of Priory Consulting said the unit was also being hit by multinationals seeking cheaper IT providers at a time of global recession.

Union talks

The latest 15,000 job cuts represent about 10% of the firm's current workforce. The previous cuts have reduced BT's total number of employees to about 147,000.

This has been a challenging year in which BT has had to tackle some significant issues
BT chairman Sir Mike Rake

BT said it hoped to remove the positions through natural wastage and voluntary redundancies, and added that it did not have plans for compulsory lay-offs.

"Our aim is to work closely with the unions to reduce BT's total labour cost, of both direct and indirect staff, as this is critical to the success of the company going forward," said a BT spokesman.

Andy Kerr, deputy general secretary at the Communication Workers' Union, told the BBC he hoped there would not be any compulsory redundancies.

"We have worked closely with the company over the last year to make sure there were no compulsory redundancies in the company," Mr Kerr told the BBC.

"We did it last year and the commitments have worked so far, as there's certainly no plans for compulsory redundancies for this year coming."

Pension worry

Robert Peston said the job cuts would be very bad news for BT's UK workforce.

BT GLOBAL SERVICES
Provides network solutions to multinational firms and large public sector bodies
Recent high profile contracts include overhaul of the NHS's computer systems in London
Currently employs 37,000 people across 53 countries
BT has been forced to write down almost £1.6bn from the value of its contracts
Made an annual loss of £2bn for the year to 31 March 2009

"Ian Livingston said the firm wants to minimise the number of BT permanent staff who would be going, but jobs are jobs," he said.

Looking head, our correspondent said BT's pension deficit was a major concern, despite BT's plans to pay in £525m in each of the next three years.

BT revealed that under international accounting standards, its final salary pension scheme moved sharply from surplus to deficit in the past year.

A year ago, at the end of March 2008, the surplus stood at £2.9bn, but a year on this had changed to a deficit of £3.8bn.

BT said this was due to an £8bn reduction in the value of the scheme's assets.

The company also revealed that the pensions regulator has taken the unusual step of intervening in the scheme's three-yearly valuation currently being undertaken by the pension fund's actuary.

BT said the regulator wanted to discuss "the underlying assumptions and basis of the valuation".

A spokesman for the pensions regulator said they were taking an interest in the BT scheme because of "its enormous size, it is the largest in the private sector".

He added: "We have a responsibility to ensure appropriate scheme funding arrangements are put in place for all pension funds we regulate."

To help plug the pension gap, BT reduced its final dividend to 1.1 pence to give a full-year dividend of 6.5 pence, which was 59% lower than last year.

Revenue growth

BT's overall group-wide revenues for the year to 31 March 2009 rose 3% to £21.4bn.

Annual revenues at its BT Retail unit, which provides phone lines and broadband to homes and smaller firms, fell very slightly to £8.47bn from £8.48bn a year earlier.

Revenues at its BT Wholesale unit, which runs its networks, declined 6% to £4.7bn.

"This has been a challenging year in which BT has had to tackle some significant issues," said BT chairman Sir Mike Rake.

Shares in the firm closed down 6 pence or 6.4% on Thursday.


Here is a selection of your comments.

Although there are no compulsory redundancies, there is a retraining programme called the CTC, you are removed from your usual work role, and placed on this staff in order to be retrained and redeployed elsewhere within the company. Many of these people, skilled engineers, are then appointed as staff in the many BT call centres, which many clearly refuse to do. However, this then puts them in breach of there contract, which means they either take the job in the call centre, or take voluntary redundancy. So in fact, many are "forced" to leave.
Anon, Newcastle upon Tyne, UK

My husband has worked for BT for over 20 years and been a committed and loyal employee, never taking advantage of the company like so many of his colleagues have in many ways. Since April 1st he has been, what's called 're-deployed'. He still goes into work every day and is being paid but has no job. He is constructively looking for something else within and outside the company, attending all the courses he can, even applying within the company for jobs far enough away for him to have to live away from home if necessary. When he was 're-deployed' he was told that even though his annual appraisals are consistently above average, those that have achieved below average are those that are being 'kept on' because they would be less likely to gat another job within BT. Forgive me - but where is the logic?????
Pauline Smith

As the vast majority of BT staff are contractors I think you will find that the total number of jobs going at BT is much higher than this. I previously worked for Global Services as a contractor and when BT switched its contract provider from Hays IT to Mahindra BT an entire department was left empty with only 5 of the 50+ desks being used, and this was by managers.
Withheld, England

By "through natural wastage and voluntary redundancies" they mean get rid of more agency staff (no pension/redundancies to worry about) and move the BT staff with no proper roles anymore into these posts that they don't want and are most likely not suited for . Something they have done in Liverpool over the last few months. Great customer care these re-employees must give!
Les Thelwell, Liverpool , Merseyside

I left BT nearly 2 years ago after 35 + years service, the last 2 years with GS, which were the worst 2 years of my whole BT career. The division is so top heavy with non producers, with glorified titles and any likely profit from the bad business being chased was eroded by the over resource and ineffective processes required to tender. How GS makes any money is a mystery to me. A radical shake up of the many tiers of line management is required here. Leaving was certainly the best move I ever made.
Bob, London

I work for BT and am a shareholder. I started as an apprentice in 2005 looking forward to a long and exciting career. I started as a specialist for global services maintaining large companies phone networks. I then got re-deployed internally due to BT cutting agency jobs and I now work in a call centre.... I should be lucky I still have a job I suppose...
Paul Cameron, Middlesbrough

I worked for BT in Preston from Sept 2nd 2008 to April 23rd 2009 and was part of global services and in particular worked on the "oneplan" contract. 50 of us got made redundant and left the Preston office in April due to redundancies. We were all contractors and we were told our jobs would be given to BT employees. There is a Liverpool branch that are losing there jobs in June and a team at Belfast also suffering the same fate. The whole setup has been a shambles from since i started. They blame lack of performance by Global Services when in reality this is due to total lack of training and therefore it was a situation of the "blind leading the blind". In February of this year we entered into a measuring period called "right first time" were basically our performance was monitored and some contractors lost there jobs for doing the slightest thing wrong. We all feared for our jobs then but worked hard and successfully passed the assessments. Then a couple of weeks later we were informed of the massive job losses. I am now unemployed and feel severely let down by how we have all been treated and i would not work for BT again after this.
Adam Briers, Preston, Lancashire

I work at BT in Global Services. It is a tough time economically but I have total trust in our leadership team. We have clarity of what we need to do from our line management and we are all working hard to make a positive impact. I also know colleagues that have lost their role and have been helped significantly to find roles in other parts of BT. There is a genuine care for staff in BT and BT is still an excellent company to work for.
S, West Midlands

I work for BT, or rather an agency contracted to BT, and this really doesn't shock me. I would actually be out of a job due to my job being given to a BT employee, but a manager here happened to save me and the others affected with a new position. However, clearly they are aiming to do it again. BT already operates on the very bare minimum of investment, especially in training for staff, and after this round of staff has gone, I wouldn't be surprised to see more go as it really cant save many other paces as it already cuts so many corners.
Anon, Scotland

My wife and I had a large holding of BT shares at one time as my wife had a holding from the workers share scheme. These like many others have fallen dramatically in recent times but fortunately were able to off load much of these before the heavy fall in value hit. She still has a BT pension which rises every year unlike some. Overall we have every confidence BT will weather this storm better than most and expect to see the company flying high again within three years.
T Bayliffe, Torquay UK

I worked for BT for over 38 years until taking voluntary redundancy last October. What is not commonly known is that there are at present well over 1000 people sitting at home on full pay because it would cost BT a fortune to force redundancy on them. In this economic climate, how can any company, even one the size of BT, afford to let this situation to continue? This once great company has been progressively trashed over the last 10 years by greedy senior management, many from America, lining their own pockets while totally ignoring the long term welfare of BT. Then when things go wrong, it's all the fault of the minions, and they simply move on to ruin another company. It's not just the bankers who are destroying this country - I'm just so relieved to be out of it all!
Steve Fox, Bingham, Notts, UK

I used to work for BT in Corporate Clients (Retail) and led, sold and managed multi-million pound outsourcing contracts as delivered by Global Services. It was policy at the time to pursue outsourcing contracts, both to protect BT installed base revenue and develop and grow revenue as part of a more strategic relationship with the client. In the world of outsourcing it is widely known that contracts are won on the bare bones, hardly any profit, we used the expression 'contracts had to wash their face', any real profit, it was widely assumed, would be derived from 'change controls' and development of the relationship over the term of the contract. However, this only really works in conditions of continuous growth, which we had then, but not now. Any IT company entering, or having recently entered an outsourcing contract and experiencing the symptoms of the current economic climate and negative growth is likely to be making a loss. I left BT, taking a package, in 2005 - I am regarded as a 'deferred pensioner'. My real concern now is a selfish one, just how safe is my pension and should I take it now while they can still pay?
Ian Seale, Bexleyheath, Kent

I am a Shareholder...but I also used to work for BT. The reason why BT is losing money is that customer service and sections of BT have gone to India... the way they did it was very underhanded. And who wants to talk to someone in Customer Service if you cannot even understand them..let alone them understanding your problem!!!!
Suli, Bedford, England

I am a BT employee and am not surprised by this announcement - I don't think any BT employee would be. There is a real emphasis on cost saving (and not just by means of job cuts) and finding better ways to work, so there is hope that we will continue to improve throughout the year. BT isn't a happy place to work at the moment and expectations of employees can sometimes be unrealistic, but we all have to make sacrifices to get back on track - at least they don't (yet) make redundancies. I've been told that the internal transition centre is actually quite an exciting place to be as it offers real opportunities and training that people wouldn't have otherwise received. There are people worse off than those who work at BT!
Joanna, Leicestershire

Bt are losing customers hand over fist because instead of lowering prices like other Telecom companies, they are putting up prices. Many companies also give international calls free but not BT. As an Engineer I get constant complaints about the Indian call centres, people not being able to understand the person in India. The current complaint is about the new Rolling contract BT have introduced forcing people to stay or pay vast amounts if they want to transfer to another company.
Alan Dubroise, Manchester

I asked to take redundancy last year but as I work for openreach I was not allowed to. Let's hope they let me go now!
Andy Barber, Bromley, London

I have been employed by BT for the last 35 years and I am a shareholder as well. So I have a detailed knowledge of the problems and there are many, engineers get paid way over the odds for doing a job that a computer does 95% off. Years ago you made the choices now you just push buttons. Martlesham Research is a large pit where shareholders funds are thrown into, very little has come out to justify the investment since 1975. Managers are getting to grips with the issues but still don't tackle them for the long term, customer service is poor just ring up for a fault report judge for your self. Of course employees will defend the company but the truth is in the pudding and it tastes terrible. Another round of cuts lets hope it gets to the meat this time and does not just mark the pastry.
Andy West, Norwich, England

I believe that the current people in charge of BT are the main reasons behind the demise. When I worked for BT it was once a trusted company you could respect. Now even their own workforce are aghast at ideas like WebWise spying on personal web traffic. Is it any wonder potential customers will not use them any more? I just hope those executives are not rewarded for their failures when they are finally brought to account.
Steve, Merseyside

I am a BT Pensioner aged 60, having left BT in 2000 and being given my pension then. Over the years of my 28 yrs service, BT continually fiddled with its contribution rate, taking "contribution holidays" when they thought the fund was flush and then making massive payments when it wasn't. This was a very short-sighted knee-jerk strategy designed to enhance the share price but it has left them in a real mess now having to play catch-up.
Colin Smith, Bristol, UK

I recently lost my job at BT Lincoln call centre, i was employed external through an agency which lost 18 employees, this was totally unexpected and an emotional time as I've been there for over 2 years. I have never had an performance issue like some people, and thoroughly enjoyed my job. I think BT haven't treated us very nicely at all, going from one of the best performers in a call centre of over 200 people to having no job was very hard.
Anon, Lincoln

I worked for the company, and I am shareholder too. I has become apparent that the some job losses are not through natural wastage but through people being force to take voluntary redundancy. If they chose not to take VR they would be performance managed out of the business. BT is now a very poorly run company, it chooses to recruit most management internally. Some of these managers do not have the qualifications or skills to do the job in the first place, this has resulted in the business not performing as well as it could have done. They only have themselves to blame for these losses.
d ask, England

I work for BT and although today's news may make out that 10% of staff to go is a lot, I think we need to appreciate that BT for many years have employed a lot of agency/contractual staff and they are generally the people who lose their jobs rather than the permanent employees. I feel that BT is still a very safe company to work for as they advertise voluntary redundancies to reduce staffing levels which makes me believe they do want to protect their permanent employees. In today's bad times, I think other companies have had to make more dramatic cuts and that BT are holding on through the bad time and very likely will be back on top.
NA, London

I worked for BT for 28 years and was made redundant as a result of their last awful cock-ups in 1990. A continuing saga of failed ventures from "Concert" through to "Global Services" most of their ventures in other countries come to a sorry end. Who is left with increased bills and arrogant e-mails telling them they have exceeded their download limit? Why the standard UK subscriber like me, now retired and trying to scratch a living in the credit crunch. As the main UK subscriber with all the advantages of owning the infrastructure to everyone's home, then you would have thought they should be able to make a business success of it; would you not ?
Peter Leigh, Oxford, UK

I'm currently working for BT through manpower agency in Leicester; I just can't believe that there are going to be further cuts of employees mainly from the UK. I had a meeting yesterday with other colleagues in regards to where BT want to be in the next 2 years & nothing was mentioned what so ever in regards to 15,000 jobs going & we were made to believe that our jobs are now safe as we have already had about 20% + cut alone from the Leicester site. As an agency worker we don't get the privileges of employees who are on BT contracts even though we do exactly the same work & at times more but without the wages, it's a shame really because as well as myself & my colleagues we actually thought we were capable of continuing with our support for BT & all we asked for was for the same but it looks like we are heading in the direction of becoming another statistic in recession hit Britain & soon or later we'll be queuing up at the local job centre like many others out there.
Mitesh , Leicester

No surprise in the latest news, I left under the last round of redundancy and took the package. I can't see how BT can continue to Move their people from their day to day jobs and put them in the Career Transition Centre known as the "Bucket", and still pay them their normal wage, until they find another job. How long can this last?. BT are still giving the higher management their bonuses when they make huge mistakes i.e. Global, if I had made such a huge cock-up I would of been booted out the door, as he was but I didn't get the same payoff, it would take an engineer to work about 70 YEARS to make that money.
Jeff Lewington, Watton,

I work for BT and this feels like a slap in the face, morale is at an all time low as it is. In our office the staff numbers have dwindled by more than half, mainly contractors but some permanent BT staff were offered three months salaries to leave. If they offer this again I am going to bite their hand off as I have no passion for working for BT anymore - like I used to.
RC, Scotland

I used to work for BT Global during the mid 90's, the same incompetent management who thought that Worldcom was a force to be reckoned with were still in the company in the last few years. BT is a victim of hierarchy that supports only those who conform; is terrified of innovation and most of all treats the staff down the chain as cost centre units rather than a resource to be nurtured and developed. After I left BT I worked briefly at Woolworths Head Office and to be honest I saw very little difference in their management style and how they did business. The only reason BT hasn't gone the way of Woolworths is because BT still has a monopoly on fixed line communication. The solution is for the Government to employ those currently out of work to lay a new cable "backbone" for the nation's communications and and then take competitive bids for the management of it (whilst retaining state ownership). This would jump the UK ahead of other nations and prevent us relying on a company that can't even organize the staff party in a brewery (that's not even a joke it's a true story).
Martin, Bristol

Things can't be that bad. I've worked for BT for over twenty years and have been turned down for their voluntary redundancy package seven times, most recently in the past couple of weeks.
Anon, East Anglia

I worked at BT GS and was made redundant in December, two weeks before Christmas. There is a lot of blame to be placed on General Manager-level management - the GM that took over my area of the company at the beginning of the 08-09 financial year was and is tearing it apart. I would love to know why he hired a family member to implement sales training across the organisation at a cost in the millions, when people were losing their jobs in the department, for example.
Ex BT Employee, South West England

I work as a BT Repair Advisor in a BT Call Centre. It took me a long time to find a job and then this one came along. I've been working there for just over 6 months as an agency worker, doing well but ever since 16 agency workers were basically forced to leave in my centre alone, I've just not felt secure in my job at all. Back in November (on my induction day for the company), the job cuts were announced and we were promised that it wouldn't affect us. Now I ask and they say they're unsure. No security at all in this company unless you have a contract with BT. I even get customers saying that it takes too long to get through. No wonder! 15,000 job cuts? You would be in a queue for 3 weeks...
Anon, Lincoln

My partner who works for BT has had enormous pressure over the past year to put members of staff onto bad performance reviews.....in some cases just for poor spelling !! Although BT are claiming that there will not be compulsory layoffs I can assure you they will try any means possible to get rid of permanent staff for any reason.
Shelley, UK

I work for BT in an outsource call centre. I only started last week. If no-one goes voluntarily will they push us out??
Kyle Boyd, Belfast

My father has worked for BT for 20 years. He has been taken off his job and sent to sit in a holding pen to wait for work to come in - whilst there is plenty of work to be done and contractors are brought in to do his job!! Surely this is illegal? All this time, fat cats are getting massive bonuses to carry out this crazy, nest feathering scheme. There is even talk of him being sent to work in a call centre in a different city if he wants to remain employed by them! Very disappointed and angry indeed.
Earl_Grey, UK

I work for BT openreach as agency staff (same work as BT staff without any benefits e.g. sick pay, pay rises etc.) and have done for 4 years. My job is going in 2 months. What angers me the most is that because of mismanagement and one groups losses the whole group has had to suffer. Global have completely ruined it for everyone else! Openreach need to be privatised and concentrate again on the infrastructure and not be at the mercy of the rest of profit grabbing BT who now only care about money and not staff or customers. Let BT compete fairly against the competitors and see how well it does when it has to stand on its own feet and not have openreach in its pockets! Let's see how well the other two departments do then! It's a dinosaur and we all know what happened to them!
Anon

I work in the local business sector of BT's structure and even I am concerned of the knock on effect this could have. I mean looking at this I doubt it will effect myself but what happens when they need to make more cuts to stop losses. who will be next?
Alex, Gloucester England

I left BT Openreach last summer after 37 years employment, I would say BT's troubles come from weak senior managers who suppress comments or suggestions from lower grades and concentrate on meeting unrealistic targets on productivity and finance - a £100 would be wasted to save £1. I left as I was fed up of having to try to do a job tied up in endless report writing to appease others who had no direct input in product being delivered and petty measures to suppress vital expenditure on tools etc. Most staff dejected by being prevented in doing a good job through stats and constant meetings about nothing. Not surprised its lost its way but not helped by OFCOM being biased against BT making a profit or being allowed a level playing field in LLU etc where other SPs plan BT's future to suit their business plans.
Colin McLeod, Cambridge UK

Just short of 40 years service and 20 as a shareholder my future is a worry and more so what kind of pension I might get. Having watched as employees have left with gilt edged packages I now feel the ravages of OFCOM and the government are taking their toll on my health. BT needs to stand up to OFCOM and ensure that the enforced loss of business to BT is reversed. Those receiving the pension should be seeing a reduction to play their part to the fund for those of us who haven't taken a farthing out of it.
Mr T, North England

I worked for BT for 38 years and in my view BT is still making the same mistakes it made a number of years ago. It is still trying to become the 'world no 1 telco/IT global provider and for customer service.' When will the top brass realize this can never be achieved. What BT needs to do is focus on the UK, super fast broadband, fibre to customer premises and their new 21 Century Network. I know there are major problems with regulation, but the focus of energy should be on this rather than trying to conquer the world. In terms of longer term strategy it should look again at mobile networks (they should never have sold O2), accelerate their plans for renewable energy (to reduce cost) and there must be call for openreach to be hived off, which would generate much needed cash and go some way to simplifying the regulation issues. Ultimately, I believe BT must become a 'smaller', but far greatly focussed organization to survive in the longer term and provide customers with value for money and investors with any rewards.
Clive French, Colchester, UK

I have worked beside IT contractors at BT who were being replaced by offshore staff in India. The UK guys offered to do the same job (that they had already been doing for well over 4 years) for less than the offshore staff would have charged (and the had no experience of the project). Despite offering to work for less, they still had their contracts brought to an early end, and BT chose to replace them with the more expensive offshore team. This is something both BT and our government should be ashamed of allowing to happen. Someone should ask why BT has so many people who come from India at the top of its hierarchy.
x, glasgow

I am a permanent worker for BT and I am not in the least concerned about being made 'compulsory redundant', because I have every faith in BT and it's ability to turn this situation round for the good. Quite apart from the fact that it has not plans to make any compulsory redundancies with the UK. BT has always stated that it protects and values it's permanent staff, and I feel very proud and fortunate to be an employee of this company. However, I can see how the above story could be misinterpreted and produce unnecessary shockwaves if you don't pay attention to the 'facts not folklore of what Ian Livingstone is actually saying, because what he says makes perfect sense.
Anon

I have been employed by an agency at BT(call centre) for five years, with the collusion of the union BT are making it easier to manage people out of their employ by changing targets and introducing rules by which it is easier to dismiss people.
x, Doncaster

My husband works for BT. We have noticed a severe downturn in his working hours in the last eighteen months resulting in a sharp drop in income. BT could look at their current running of work patterns and how to utilise employee's working hours in a bid to reduce overheads. Also, Managers waste a huge amount of company time when they do not understand how the foot soldiers work.
Lesley Standish-Gore, West Lancashire

As an ex BT employee, I feel so sorry for the staff effected by the lob losses. However, BT's management needs to be seriously questioned. A monster of a company has been created which has become inefficient in many areas. Time to seriously consider the breaking up of business lines. Wholesale services should be independent, Global Services sold off. The managing of business expectations to investors, analysts has been poor through the lack of experience by senior management at BT. Break it up, slim it down and create more lean and dynamic businesses which can compete in this telecommunications market.
Robert Humphreys, London

I work at BT and it has long ceased to be the company it was. Gone is the caring, sharing company we knew and has been replaced by intimidation and victimisation of its workforce. BT, for the last year, have continually driven their workforce to the point of intolerance to invoke resignations. Furthermore, the willingness to invoke disciplinary measures for even the most minor occurrences has created a culture of fear and anxiety and 15000 voluntary redundancies would be snapped up tomorrow given the eagerness of the BT workforce to walk away from the horrid conditions they are being forced to work under.
John, Belfast

I used to work for a BT project in the IT arm of BT i.e. Tech Mahindra. Due to the company's annual loss I along with many of my colleagues have been asked to resign or we will be relieved from duty effective immediately. We resigned but we were not even paid severance benefits or career assistance. It's been difficult times for us now.
Jim, Pune, India



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