BT results: 10,000 jobs to go amid profit decline

BT released its second quarter and half year results showing growth in BT Retail and Openreach, but disappointing in Global services.

Although revenue was up 4 percent to £5.3 billion, profits were down to £590 million, compared to £660 million in the same period last year.

BT Retail and BT’s Wholesale division both performed well. BT’s 21st Century Network (21CN) rollout, which will provide headline speeds of 24Mbps is said to be on track to achieve 40% of the UK market by April 2009 and 60% by March 2010.

Its retail arm BT Total Broadband remains the UK’s number retail provider with 4.6 million customers.

But the real problem came from BT Global Services where profits were very much down, with BT warning that group profits are likely to show a small decline in the current financial year.

“Three out of our four business units, BT Retail, BT Wholesale and Openreach are delivering on or ahead of target,” said Ian Livingston, Chief Executive of BT. “But profits in BT Global Services are simply not good enough and we are taking decisive action to put matters right. We have appointed Hanif Lalani as the new CEO of BT Global Services and he will continue to grow the business while reducing the cost base.”

Around 10,000 jobs are expected to go by the end of the financial year as part of an ongoing efficiency programme. BT says most of the jobs to go will be in the area of indirect labour, including agency, contractors, subcontractors and offshore workers.