It has been announced that within the next year, 20,000 agency and contract positions with BT will be lost as part of their £1 billion plan to cut costs. The number of external job losses is much higher than expected. This follows 10,000 external positions becoming obsolete last year. It is expected that a similar number of indirect roles will be lost in 2010.
The telecommunications giant has already cut 15,000 jobs during 2009, 5,000 of which were during the past couple of months alone. Global Services, BT’s IT unit, posted a quarterly loss on revenues of around £2 billion, contributing to a loss for BT of £134 million before tax this year. It is, therefore, expected that job cuts at this unit will account for one third of the overall cuts. BT Chief Executive, Ian Livingstone publicly commented that the performance of the unit was unacceptable. The Global Services Unit has been affected by clients searching for cheaper alternative IT provision. It has also misjudged the value of its efficiency savings. To add to its problems, it is also thought that BT has overestimated the value of its key contracts.
The difficulties at Global Services have eclipsed the departments that have been performing competently in this difficult market, such as the Openreach, Wholesale and Retail units.