BT to cut 4,000 jobs amid 19% pretax profit fall

BT boss Gavin Patterson
BT boss Gavin Patterson

BT is cutting 4,000 jobs after reporting a pretax profit fall of 19% to £2.35bn.

The telecoms giant's reported revenue was £24.06bn, up 27% for the year ending 31 March. BT said its earnings were in line with forecasts it downgraded in January.

The loss comes after BT was fined £42m by Ofcom and £300m in corporate customer compensation after its Openreach infrastructure arm was ruled to be hindering rivals Sky and TalkTalk from installing high-speed internet lines.

BT has since agreed a deal to legally separate Openreach from the rest of the group.

Adjusted pre-tax profit, excluding specific items, rose 5% to £3.5m, while underlying earnings (Ebitda) increased 18% to £7.7bn.

Today’s earnings included a £300m restructuring charge over the next two years. Chief executive Gavin Patterson is looking to cut 4,000 managerial and administrative jobs and invest more in customer service and broadband upgrades. 

Neither Patterson nor finance director Tony Chanmugam will receive bonuses this year, with the latter stepping down to take up a new role overseeing the integration of EE into BT. Chanmugam will be replaced by BG Group finance director Simon Lowth in July. 

Patterson said: "Our integration of EE is going well, our UK consumer, SME and corporate businesses are performing strongly, and we’ve made significant progress in improving customer experience across the group.

"Our agreement with Ofcom on Openreach governance brings to an end a period of uncertainty. And securing exclusive rights to top-flight European football until 2021 puts our consumer businesses in a strong position."

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