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Rumors of Major BT Job Cuts Should Not Be a Shock

Ray Le Maistre

BT's management is discussing plans to cut about 25% of its total workforce, according to a report from Bloomberg.

If enacted, that would be in addition to the jobs cull it announced last year and take the UK incumbent operator's headcount down to about 75,000.

While the number of jobs involved is concerning, that such talks should be taking place should not come as a shock to anyone in the telecoms sector -- as my astute and numbers-friendly colleague Iain Morris has previously noted, BT doesn't shape up well in the efficiency stakes. (See BT Looks More Bloated Than Ever.)

And everyone should be prepared to hear of such "telco set to cull its workforce" discussions on a regular basis. Telco margins are thin, costs are rising, investments to remain relevant in a 5G world are going to put pressure on balance sheets -- spectrum plus network upgrades and staff training doesn't come cheap -- and then there's the elephant in the room that is automation. Computers are going to take over many tasks currently performed manually in customer services and day-to-day operations at traditional telecoms operators -- it's going to happen, folks.

In addition, BT has a new CEO in the form of Philip Jansen and investors will expect some sort of shake-up that will put a smile on their faces and fuel their annual vacations. Such is life.

BT's share price ended the day in London up by more than 1% at 225 pence Wednesday following the news.

In the first half of its current fiscal year (which ends this weekend), BT reported a 2% year-on-year dip in revenues to £11.59 billion (US$15.3 billion).

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— Ray Le Maistre, Editor-in-Chief, Light Reading

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