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BT To Cut 15,000 Jobs As Pension Fund Crisis Deepens

With its Global Service division causing huge loses, BT has communicated to its shareholders that it will cut nearly 15,000 jobs this year in an effort to reduce its overall costs.

Incidentally, BT has also projected that its revenues are expected to fall by 5 percent in this year because of the ongoing global recession.

Explaining the situation in which BT finds itself today, its chief executive Ian Livingston, mentioned “Three out of four of BT's lines of business have performed well in spite of fierce competition and the global economic downturn. However this achievement has been overshadowed by the unacceptable performance of BT Global Services."

BT also has to worry about the huge shortfall in its group pension fund which now stands at a staggering £4bn as compared to the figured of £2.8bn for last year.

Though BT continues to earn substantial revenues in UK, however it’s Global Services which caters large organisations like Microsoft, NHS etc is reeling under huge losses and has been instrumental in driving the whole organisation into a financial mess.

Though the job cuts are unlikely to go down well with the worker unions and the retrenched employees, its efficacy in cutting loses can only be known in near future.

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Our Comments

BT has managed quite successfully to grow from being a telco monopoly into a major actor in the world of telecommunications. But its past responsibilities (the fact that it has to pay for pension schemes and work with the government to improve universal broadband coverage) that are likely to weigh heavily on its financial stability.

Related Links

BT Lowers Dividend, Plans to Cut Further 15,000 Jobs (opens in new tab)

(Bloomberg.com)

BT Group Posts Loss and Announces Job Cuts (opens in new tab)

(The New York Times)

BT job cuts soar to 30,000 as it tumbles to annual loss (opens in new tab)

(Telegraph.co.uk)

BT posts huge 4Q loss, to cut 15,000 more jobs (opens in new tab)

(Associated Press)

100s of BT jobs to go in Scotland (opens in new tab)

(BBC News)

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at ITProPortal.com where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.