British telecoms operator BT said on Thursday it will cut up to 15,000 more jobs, or 10 percent of its staff, after posting an annual net loss of 83 million pounds in its 2008-2009 financial year. BT added in a results statement that it had already cut 15,000 jobs over the last 12 months, which was 5,000 more than previously announced in November, while total lay-offs could total 30,000.
The deep job cuts follow major problems at the company's struggling Global Services division, heightened concerns about its ballooning pension deficit and a deepening recession in Britain. The firm swung into losses after a "challenging" year amid the spreading global economic downturn. "This has been a challenging year in which BT has had to tackle some significant issues," chairman Mike Rake said in the earnings release.
The net loss for the 12 months to the end of March was equivalent to 92 million euros or 125 million dollars, and compared with a net profit of 1.737 billion pounds in the previous 2007-2008 fiscal year. "The number of indirect employees working through agencies or third party contractors was reduced by around 10,000, giving a reduction in our total labour resource of some 15,000 in the year," BT said in the statement.
"We expect further reductions of a similar level next year." The group also revealed that it faced a pre-tax loss of 134 million pounds in the year to March 31. Sales grew three percent to 21.39 billion pounds - but BT warned that they would likely fall by between four and five percent in the current 2009-2010 year.
"Three out of four of BT's lines of business have performed well in spite of fierce competition and the global economic downturn," said chief executive Ian Livingston. "However this achievement has been overshadowed by the unacceptable performance of BT Global Services and the resulting charges we have taken. "During the year we have changed the leadership of BT Global Services and started to turn the division around." BT said it has taken an extra charge of 280 million pounds against its badly-performing Global Services division, which provides telecommunications and IT products to large international companies and governments. Global Services was expanded rapidly in recent years - but at the same time its costs have rocketed, sparking several profit warnings.
Total restructuring costs at the troubled unit are expected to hit 1.3 billion pounds. BT, which said it had no plans for compulsory redundancies, added that its workforce dropped from 162,000 to 147,000 in the year to March. The results, among the worst since BT was privatised in 1984, are also compounded by the cost of trying to plug its huge pension deficit.
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