BT’s Global Services IT division has been hit with further troubles following the imminent departure of its chief executive, Royston Hoggarth. He only took up this high profile position back in 2008 but the past year has seen BT make a full year loss for only the second time ever. As a result, Hoggarth has been served his notice. This follows the redundancies of many contractors within the division over the past year. It is not clear, however, what Hoggarth’s severance package will amount to. He was earning an annual salary of £2.9 million including benefits. His replacement is Mark Quartermaine.

Hoggarth’s predecessor, Francois Barrault, also met the same fate when he was ousted last year. At the time this was attributed to the need for the IT serviced department to save money. Ian Livingstone spoke on behalf of BT to their shareholder magazine stating that addressing costs and lowering profit forecasts within IT services would set them back on the road towards economic growth.

However, this has not been the case. The Global Services division has continued to struggle financially. This has resulted in the announcement that 20,000 contractor positions will be deleted by next year in an effort to cut costs.

BT have publicly denounced the “unacceptable performance” of the Global Services unit after it contributed to an overall pre-tax loss of £134m. This was in comparison to their £2bn profits the previous year. This news resulted in the BT share price plummeting to its lowest since 1984.

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