Coming on top of similar gloom from the likes of Bovis Homes, Virgin Media and GSK, these cuts mean that some 15,000 UK jobs have now been lost in the past three days alone. Numbers which didn’t even figure in the already-dismal 11-year high in official unemployment released yesterday.
But such are the strange times we live in that BT’s share price actually rose by nine per cent on the announcement. Bad news is good news these days - everyone knows that there is trouble ahead, and those companies which are seen to be taking ‘decisive action’ (is there any other sort?) get a boost as a result.
Despite the fact that only last week he announced a surprise profit warning on the back of the ‘unacceptable’ performance of its Global Services division, BT boss Ian Livingston seemed eager to play down any suggestion that the job cuts were as a result of poor trading. ‘This is a reflection of the fact that we have to become leaner,’ he said on Radio 4’s Today programme. ‘We need to do it in good times and bad.’ That pesky global financial crisis must simply be a coincidence then.
To those who remember the dark days of the early 1990s, the news will seem strangely familiar – hardly a year seemed to go by back then without BT shedding a few thousand more jobs as it slimmed down from its days as a publicly-owned utility.
The staff affected this time will be mostly contractors and agency employees, added Livingston, whilst hinting that there could be further reductions in BT's 160,000-strong global workforce in the pipeline.
All those job cuts will mean considerable cost savings, of course, which the company hopes to bolster further with a radical pension shake-up next April. This will see retirement ages rising to 65 and entitlement cuts, saving an estimated £100m annually. BT’s pension scheme assets, among the largest in the country, are worth nearly £35bn, almost four times the value of the company itself.
Still, for some of those facing the axe there could be a silver lining – a significant proportion of the UK’s many successful IT and telecoms SMEs were founded on the redundancy pay-offs of those downsized BT execs back in the 90s. Who’s to say the same thing won’t happen again this time?
In today's bulletin:
BT pulls plug on 10,000 jobs
Bank backtracks as economic clouds gather
Editor's blog: No cause for schadenfreude
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