BT said it was shedding a total of 10,000 jobs yesterday on another brutal day of British company cutbacks. Ian Livingston, the group’s chief executive, said that the cuts were necessary as he was preparing the group for a lengthy recession that could last another two years.

The company had already cut 4,000 jobs and a further 6,000 would go by March. A hiring freeze means that BT is aiming to achieve the cuts largely by natural turnover, by a reduction in contract workers, and voluntary redundancy schemes.

The scale and breadth of companies’ job-cutting has increased dramatically this week. Among others reducing their staff yesterday was JCB, which said last night it would have to cut an additional 398 jobs in Britain. Three weeks ago it announced 178 job losses, but said that it had been able to keep cuts to a minimum after hundreds of its staff accepted a £50-a-week pay cut. JCB’s management said yesterday that it had no choice but to make further cuts after a drop in orders.

At Leyland, the commercial vehicle maker, 250 jobs are set to go as the company said that it was extending its Christmas shutdown because of a “severe decline” in demand.

Last night Royal Bank of Scotland announced plans to axe around 3,000 staff. The bank, which is in line for a £20 billion taxpayer handout to help shore up its finances, is understood to be cutting the posts from its global banking and markets workforce over the coming weeks.

So far this week big companies have announced the loss of 18,000 jobs, and analysts expect worse to come. Britain is already experiencing its highest level of unemployment for 11 years, with 1.83 million people out of work at the end of September. Numbers are forecast to rise to above two million by Christmas. The number of people claiming unemployment benefit has risen to 980,900, its highest level since the end of 1997.

Although the construction and property sectors have been worst affected in recent months, businesses in many other sectors of the economy are now starting to reduce jobs.

On Tuesday Virgin Media, the cable, broadband and mobile phone group, announced that it would shed 2,200 employees within three years, while Yell, the directories company, is cutting 1,300 roles.

The troubled property industry remains at the centre of the jobs turmoil. Industry experts said yesterday that up to 15,000 estate agents faced unemployment if house sales showed no sign of recovering.

Since the property market peaked in July last year, between 5,000 and 7,000 estate agents have lost their jobs, either through staff cuts or through resignations as employees struggled to live on a basic salary without commissions.

Mr Livingston said that BT wanted to reduce its reliance on consultants and contractors as it geared up to face two years of recession. Of BT’s 160,000 workers, 50,000 are contract staff. He said: “The majority of cuts will be indirect workers. We will be redeploying and retraining our own people. We think it is the right thing to do, both financially and morally.”

He pointed out that since 1990 the group had more than halved its workforce, cutting numbers from 250,000 to 110,000, almost entirely without forced redundancies.

Mr Livingston said that the job cuts were part of a continuing cost-cutting programme that will save the group up to £800 million a year. His prediction that the recession would last for two years is significantly longer than the Bank of England’s, which forecast this week that the economy would start growing again by next summer.

He said that the cuts were pre-emptive, rather than a reaction to the economic slump.

“It is going to get tougher, there’s no question about it. I’m sure as unemployment rises and businesses shut we will see some people saying they can’t afford \,” he said.

Fewer people are signing up for new broadband packages, he added, partly because fewer people were moving to new houses and partly because the majority with computers were already signed up to services.

The City welcomed news of the job cuts yesterday with BT shares rising 8.89 per cent to 122.5p.

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