BT will cut up to 55,000 jobs and replace a fifth with AI

BT CEO Philip Jansen said the cuts would allow the company to become «a more cost-effective business with a brighter future.» Photo: Holly Adams/Bloomberg.

However, the CEO insists that technology will not completely replace humans. He said: “We will not be in a situation where people will feel like they are dealing with robots.”

The wide layoff, which accounts for more than 40 percent of the company’s employees, marks a significant escalation of BT’s cost-saving efforts funds aimed at offsetting the impact of the rapid growth of inflation.

In November, BT raised its savings target from £2.5bn to £3bn by the end of 2025. Mr Jansen warned that further job cuts would follow, but did not say how many.

The announcement was made on Thursday, with BT reporting a 12% drop in pre-tax profit to £1.7bn sterling, mainly due to higher networking costs.

Revenue fell 1% to £20.7bn. Growth in Openreach's broadband division was offset by declines in other divisions.

Cash flow fell 5% to £1.3bn (the lower end of the forecast) due to higher capital expenditures. Shares fell 9%.

The scale of the layoffs reflects the scale of the problem facing Mr. Jansen, who has already accelerated job cuts by imposing mandatory layoffs at the former telecommunications monopoly.

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BT has previously said it will be making significant cuts to its Openreach division as the completion of the full fiber rollout and the disconnection of customers from the legacy copper network eliminates the need for thousands of engineers and maintenance staff.

BT are key numbers.

The telecoms giant has now deployed fiber-optic broadband networks in more than 10 million homes and will reach 25 million by the end of 2026.

But Dan Ridsdale, director of TMT at the Edison Group, said that the scale of the new cuts is «surprising.»

John Karidis, an analyst at Numis, said: «I don't quite understand why they needed to go public with this now and to what extent they shot themselves in the foot by damaging employee confidence.»

» I don't quite understand why they they did it because if I were an employee, I wouldn't go out of my way to do what the company needs.»

A senior industry source added: «Can you imagine that this will do with morale? In fact, every second person working there today will leave in the next five to seven years. It will be like the Hunger Games.”

Industry insiders also questioned the timing of the announcement as Mr. Jansen is expected to retire next year.

A source said, “I think it's strange, maybe a bit of a panic. Jansen is actually announcing a new five-year strategy, but only intends to delay for a year.

“Shareholders will not be impressed, and the board of directors has effectively tied the hands of the new CEO. .”

Job cuts could also lead to renewed conflict with unions. Some 40,000 workers quit last year over a wage dispute.

is on strike. Credit: Guy Smallman/Getty Images

In November, BT agreed to a £1,500 pay raise, ending the first company-wide strike in 35 years.

Prospect, representing thousands of BT managers, said , which is «deeply concerned» by the latest cost-cutting plans.

Prospect National Secretary John Ferrett said: «Announcing such a significant cut in this manner will be very disturbing for workers who have done so much to stay connected with the country during the pandemic.»

Communications Workers Union spokesman who represents BT's 40,000 employees, said: «We have made it categorically clear to BT that we want to keep as many direct jobs as possible and that any cuts must come primarily from subcontractors and attrition.»

G- Mr Jansen said BT is working with union bosses. through a process of job cuts.

BT will also have to convince investors that it can overcome the impact of rising costs and avoid competition from rival Virgin Media O2 and smaller fiber broadband companies.