Elizabeth Judge, Telecoms Correspondent
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Unions and analysts are gearing up for thousands of job cuts at BT after a radical shake-up of the telecoms giant.
The company is expected to reveal a significant reduction in its headcount at its second-quarter results next week. It comes after an announcement in April about a restructuring aimed at making the company more efficient and helping it to compete better in Britain’s telecoms and broadband market.
At that time BT said that the reorganisation would result in “restructuring costs” of about £450 million. Analysts at Citigroup expected the group to announce in its results next Thursday a “significant reduction” in employees, accounting for £230 million of that £450 million.
Sources said that the cuts would hit middle management and would take the form of voluntary redundancy packages. The plans are thought to have been discussed by BT with Connect, the union.
The telecoms group is expected to say that overall staff numbers could be maintained through the recruitment of more lower-ranking staff.
A BT spokesman said: “We will be updating the City on our transformation plans at our results next week.”
BT is one of the country’s biggest employers, with a 106,000-strong workforce employed at an annual cost of about £5 billion. The group’s total wage bill increased last year by £243 million as it recruited additional staff to service its network.
Many analysts believe that BT could benefit from streamlining. One said that a move to cut jobs would be welcomed to release “latent efficiency growth potential”.
Several senior staff, including Andy Green, head of strategy and operations, have recently quit BT. Mr Green, who was thought to be a future chief executive, will become head of Logica, the troubled Anglo-Dutch computer services company.
The shake-up at BT is part of its efforts to transform itself from a calls and line business into a modern communications player serving big multi-nationals as well as consumers. The move involves the transferring of 20,000 employees into business units called BT Design and BT Operate.
BT has said that it expects a pay-back on the total £450 million restructuring charge within three years.
Competition for telephone and broadband customers in the UK, where BT is competing with big-name rivals such as Virgin Media and Carphone Warehouse, has already triggered cuts elsewhere in the sector.
Last year Cable & Wireless, BT’s main competitor in the business market, announced 3,000 job losses at its UK business. Tiscali, the Italian broadband and pay-television group, is also in talks about up to 800 cuts after its acquisition of Pipex, its smaller rival.
News of the expected staff reductions came amid an escalating row between Ofcom, the telecoms watchdog, and Brussels over the introduction of a “super-regulator”. Ed Richards, the head of Ofcom, has condemned the plans as likely to undermine his organisation, but yesterday Viviane Reding, the European Information Society and Media Commissioner, said that “no one plans to question the existence of Ofcom”. The commission was seeking to ensure that national telecoms regulators “work more in harmony”, she said.
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i don't know what all the fuss is about. As technology moves on jobs will be cut. As a former employee I hve nothing but praise for a comany who does its best. They just can't win. Staff are well paid - when i left 11 years ago I was paid around 19.5K a year and I wasn't a manager. Enough said
Liz, Edinburgh, Scotland
Well i have worked for bt 28 years and i am happy with my imput to it ...just get over it .
joe kilbride, prestwick, scotland
I worked for BT for 33 years and gave my best years at my best to provide the best for my customers. In the end I became so ill and BT management played every dirty trick with me to get rid of me. BT values and claims that they value the work force put me to shame. BT's claim about becoming the best company in the world is just a joke. Shame to BT and above all it's management.
Billa, Southall, Uk
Well having read the above and as a ex employee of 30 years ( I left in Sept 2006 as a mid magmnt band ) it is the best thing I have ever done . Its a real shame that the destruction of the Co continues especially of Martlesham the boffins there were the real future for us and I feel for the remaining employees .I would advise anyone old enough and with long enough service not to hesitate if offered the std release package go for it there is life outside of BT and its pleasant !!!
All the best to those who remain
archie, up north,
Being an Openreach employee, I must admit that at times even I begin to wonder where the company is heading. 21CN is what BT hopes, will give us an edge over all our rivals and make us world leaders in the Telcoms Industry. I only hope they are right, if not all the sacrifices made by BT's employees will have been in vain. For BT to survive in this cut throat market, it must convince its customers and the rest of the world that we are the best. This will only be achieved by sustained effort, capturing new markets and BT's willingness to show its workforce that they really count for something.
Alan Clark, Uxbridge, England
I am an employee, in the business sector of Bt, and quite frankly i am embarr to work for the company. All you hear are complaints from....Customers & Managers! We can't win. I treat customers as i want to be treated But the company doesn't want that, all they want is Sales, at all costs!!
Jane, Cardiff,
BT has created BT Design and BT Operate by pulling all the IT people in BT. Now they are forcing people from these two units into the Redeployment Unit to leave the company and then to export the jobs overseas in the name of cost-savings at cheap labour cost for very poor quality of service and to destroy BT so that it changes beyond recognition. BT does not care about its employees not its customers - it is simply seeking quick solution to save cost at the expense of poor quality of service. The top management must think why customers are leaving BT and act accordingly rather than bullying its employees.
Andrew Smith, London,
20 minutes to speak to BT? You were lucky! It has taken me 6 weeks for a telphone problem and 3 weeks for a broadband problem. Neither of which are fully resolved 10 weeks and a private engineer later!
Jo, manchester,
Watchdog are already having a field day as they tear BT to pieces with its poor customer care, insulting attitude of its Indian Call Centres, and its inabilty to answer calls in an expected time span.
It is a well known fact that the man at the top, does not listen to feedback from those working the company, and is the main reason why BT has failed to follow other companies, in pulling the customers call centres back into the UK.
BT are failing the way they did when they were the GPO. Privatisation ripped the company to bits, but the rebuikt product was far better. Its time for a reshake once more, and maybe starting at Higher management will produce greater results, than discarding middle management.
Ben, Southampton, UK
Nothing new in this. The last voluntary packages came out in June 2007 with a closing date of September. They didn't get the numbers so it has just come out again.
Rob, London, UK
I can only agree with both Johns. I recently left BT after 35 years there and I can honestly say it's the best decision I have ever made. BT no longer cares about either it's staff or it's customers. It just plays the profit game.
Only now, as an outsider, am I truly aware of what the public perception is of BT - and it is absolutely dire! How can such an established company be so unaware of it's responsibility to both customer and employee, and not care about either in any case?
Perhaps someone within the company should question why the City rates BT so low. Could it possibly be something to with just not delivering the promised performance? Think 21CN, which will probably never do what it was promised to do!
John, Manchester,
The research establishment down at Martlesham should have been left alone; granted. But as for the 'convoluted processes' and 'fighting the system', thats been true as long as i've worked for them.
On the other hand, there's some very, very exciting stuff already being released. Fon open wireless; Fusion and all the other new wave services. Global services have by and large been doing well also (Shame on the UK govt for awarding the e-borders contract to a non-uk firm)
Tim, Ipswich,
As Bt employee I am seeing the corporate rape of BT intellectual Property with thousands of jobs being transferred to India and to Hungary. This is a false economy, it now takes much longer to develop and deliver innovotaive new products to market. The quality of software delivered is poor and often requires corrective work. Our once flagship Research and Development capability in Ipswich is a shadow of its former self with the so called intelligence available at cheaper labour rates. Our customer service is also outsourced to India. I tried dialling 150 the other day and was advised my call would be answered in 20 mins . BT has lost the plot. They dont care about the workforce it is constant job cuts. Those left spend their day bogged down in convoluted processes and fighting the system just to get the simplest task completed.
John, London,
This is not news, it's already happened/happenning in BT and has been for some considerable time!
John, Ipswich,