BT today revealed plans to cut 10,000 jobs by the end of the year after pre-tax profits slumped by 11 per cent in the first six months of the year.

Today's surprise cut by the former state-owned telecoms operator means almost 15,000 British jobs have been lost within the past three days, after Virgin Media, Yell and GlaxoSmithKline took the axe to staff.

Yesterday, it emerged that British unemployment hit an 11-year high of 1.82 million during the three months to September and is forecast to peak at 3.3 million by 2011.

Mervyn King, the Governor of the Bank of England, finally acknowledged this week that the UK was heading for a full-blown recession, and signalled further interest rate cuts on top of the 1.5 per cent reduction last Thursday.

BT said today that most of the job losses would be among contract, agency and offshore workers. Sub-contractors and other indirect employees would also lose their jobs, the group said. About 4,000 jobs have already been lost.

The job losses, from BT's global workforce of 160,000 would be complete by the end of its current financial year in March, the telecoms group said.

The company said the cost of staff leaving already during the three months to the end of September had already hit £36 million.

Ian Livingston, chief executive of BT, described the action BT was taking as "decisive".

BT said the move was aimed at reducing its dependence on consultants and contractors. About 4,000 of the job losses will be direct BT staff, the remaining 6,000 will be from related employees.

Shares in the FTSE 100 blue-chip group rose almost 9 per cent in early stock market trading. Shares were 10p higher at 122.5p.

Over the six months to September 30, pre-tax profits before specific items fell 11 per cent to £590 million on sales up 4 per cent at £5.3 billion.

BT admitted that its performance was "disappointing" and the results in its struggling Global Services division were "simply not good enough", where earnings before interest, tax, depreciation and amortisation fell by 36 per cent to £119 million.

The company said that because of the problems in Global Services, revenues would hold up well but profits for the group would show a "small decline" for the full year.

Keith Bowman, equity analyst at Hargreaves Lansdown, the stockbroker, said: "The group is effectively firing on three of its four cylinders, with the Global Services division currently disappointing. Sales to the division’s international customers have continued to progress, but management appears to have taken its eye off the cost base."

BT has reinvented itself in recent years, having spun off its now highly successful mobile phone division, O2 and ridden itself of a massive £30 billion debt burden. Under Mr Livingston the group has concentrated on providing network services for corporate customers.

In residential services, it has begun to compete for more efficiently with the so-called triple and quadruple-play operators, who provide TV, broadband, landline and mobile phone connections as part of a combined package.

BT, which operates as four divisions, said today that three of them were functioning smoothly, with the setback in Global Services due to slower than expected cost-cuts, declines in more profitable business lines and the effects of the falling pound.

Just two weeks ago BT issued a surprise profits warning and parted company with the division's chief executive, Francois Barrault, who was replaced by BT chief financial officer, Hanif Lalani.

BT is also battling against huge liabilities in its pension fund, which is among the largest in the country and is managed by a specially created fund manager, Hermes.

Last week, BT began consulting on a deal for the pensions scheme that would involve staff contributing more and continuing to work until they are 65. At the moment, BT's retirement age is 60.

BT's pension scheme assets are worth £34.4 billion almost four times the value of the entire company.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts