Like many firms have been forced to cut back on contractors due to the grim economic climate of present, BT is now due to reduce the pay of the freelance workers in its IT services unit by up to 30%, it emerged after the company announced an across-the-board pay freeze for its 100,000 staff, including directors.

The pay cut follows apparent disappointment in the performance of BT Global Services, which was supposed to power BT’s growth, but instead failed to live up to what recession has made apparent to be over-optimistic profits projections. During the past few months, 6,000 contractors within the group has already been made redundant, and those remaining are now faced with pay cuts to compensate for the 81% slump in third quarter profits blamed on the performance of the unit.

A BT spokesman confirmed the situation on the Friday: “BT Global Services has asked some of its contractors to accept lower rates of pay.”

“This is part of the ongoing cost-control programmes at BT. We believe this review will ensure contractors are paid according to the currently appropriate market rates. Many of our competitors and other large organisations have carried out similar exercises; this is not unique to BT.”

Other measures already taken by BT to reduce company overhead costs include changes to the company pension scheme – the biggest in the UK – which involved raising the retirement age to improve the fund’s financial position.

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