British Telecom to shed 15,000 more jobs, cuts dividend

May 14th, 2009 - 5:36 pm ICT by IANS  

London, May 14 (IANS) British Telecom (BT) Thursday announced 15,000 job losses, mostly in Britain, and cut its final dividend after reporting fourth quarter losses of 977 million pounds.
In comparison with the losses in the three months ending March 31, the company made profits of 426 million pounds a year earlier.

BT said it hoped to remove the 15,000 positions, representing 10 percent of the company’s workforce, through natural wastage and voluntary redundancies.

“BT has no plans to introduce compulsory redundancies,” a spokesman said.

“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,” he added.

BT, which has already shed 15,000 jobs, said the new redundancies will be made over the next 12 months.

The losses were put down to BT’s troubled Global Services division, which provides communications services to government agencies and companies, including Microsoft, Reuters and the National Health Service.

The division suffered pretax losses of 1.5 billion pounds, BT said, describing its performance as “unacceptable”.

BT had expanded the unit rapidly in recent years but saw costs spiral.

Chief Exeutive Ian Livingston said, “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 and the resulting charges we have taken.”

BT also cut its total dividend by 60 percent in a bid to close a net pension deficit of 2.9 billion pounds.

“Although far from impressive, the worst seems to be out of the way for BT,” said Manoj Ladwa, senior trader at ETX Capital.

“Shareholders are likely to be encouraged by its dividend policy and measures undertaken to turn around its underperforming Global Services division,” Ladwa added.

Related Stories

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |