2,200 jobs to go at BT’s loss-making IT division
Telecoms group BT is set to cut around 2,200 jobs from its loss-making IT services division Ignite, it emerged today.
BT said the cuts were part of its plan to reduce staff numbers by between 5,000 and 6,000 a year for the next three years in line with cost-cutting measures previously announced.
Ignite, which builds corporate IT systems for firms such as Fujitsu, Lufthansa and BMW, was recently singled out for criticism by BT’s chief executive Ben Verwaayen at a strategy briefing.
The job cuts are likely to come from the division’s administration unit, with around half of the 2,200 expected to be in the UK, although BT said the reductions would be made through voluntary redundancies and natural turnover.
The group added that the job cuts would also be off-set by plans to recruit around 1,200 additional staff to work in Ignites sales and marketing areas.
Ignite currently employs around 17,000 people across Europe. It has 13,000 staff in the UK, with the rest in Belgium, Holland and Spain.
The cuts are part of plans to change the profile of the workforce in line with the division’s strategy to concentrate on recruiting more customers, rather than investing in and expanding its network.
BT has said it wants the business too reach break-even on an EBITDA basis - earnings before interest, tax and depreciation - by next year.
The success of Mr Verwaayen’s back-to-basics push will be revealed on Thursday when the group reports its full-year results following a year of major transformation.
The figures are expected to show that the group is on the road to recovery, although profits will be distorted by a number of changes at BT, including the disposal of Yell and the demerger of mobile group mmO2
Fund manager Gerrard believes pre-tax profits for the year to the end of March will come in at around £1.39 billion, down from £2.07 billion a year ago.
News on cash generation, net debt and the cost-cutting programme at the significantly slimmed-down BT business will also be key as Mr Verwaayen looks to get the house in order and prepare for growth in areas such as broadband.
