BT to axe 15,000 as global group drags down result
BT said it expects to cut around 15,000 more jobs this year as the global services group continues to weigh on performance.
The UK carrier fell to a pre-tax annual loss of £134 million (€149.5 million) for the year ending in March, BT said.
Revenue grew just 1% for the full year and 3% in the fourth quarter.
“Three out of four of BT's lines of business have performed well in spite of fierce competition and the global economic downturn,” BT CEO Ian Livingston said. “However this achievement has been overshadowed by the unacceptable performance of BT Global Services and the resulting charges we have taken.”
He said the company would cut opex and capex by more than £1 billion in 2009/10.
After a review of BT Global’s contracts, the company recorded a further charge of £1.3 billion, of which £1.2 billion relates to two major contracts, reflecting a “more cautious view of the recognition of future cost efficiencies,” the company said.
Two other major contracts were the subject of ongoing discussions, it added.
Global services posted an operating loss of £198 million. Revenue grew 6% to £2.36 billion and ebitda fell 86% to £43 million. The company took a £280 million restructuring charge for the division, with further charges of £420 million over the next two years.
BT retail's operating profit was £324 million, with ebitda up 11%. BT wholesale ebitda fell 3%.
Underlying operating costs fell 2% excluding one-time charges due to job cuts of around 15,000 over the year, BT said, and the company is planning similar reductions this year.