BT Group, the largest broadband and mobile provider in Britain, has announced plans to cut up to 55,000 jobs, including contractors, by 2030. This reduction could potentially account for over 40 percent of its workforce as the company completes its fibre rollout and adapts to new technologies such as artificial intelligence (AI). Under the leadership of CEO Philip Jansen, BT has been focused on building a national fibre network and deploying high-speed 5G mobile services as part of its transformation plan. While the company reported revenue and core earnings growth for the first time in six years, the costs associated with business transformation and the impact on its free cash flow have affected its stock performance.
Jansen stated that after the completion of the fibre rollout, digitization of work processes, adoption of AI, and simplification of its structure, BT will rely on a significantly smaller workforce and reduced costs. The company expects the total number of employees to decrease from 130,000 to between 75,000 and 90,000 by its 2030 financial year. Approximately 30,000 of the current employees are contractors. The job cuts will occur gradually over a five-to-seven-year period as the fibre build is finalized and 3G services are phased out.
The Communication Workers Union (CWU) expressed that the job cuts were expected given the upcoming changes in infrastructure and technology. The CWU emphasized the importance of discussions between BT and the union to ensure a smooth transition and advocated for retaining direct jobs while reducing contractors.
BT’s competitor Vodafone also recently announced its plans to cut 11,000 jobs worldwide in an effort to regain its competitive edge.
Jansen explained that around 10,000 fewer network engineers would be required as digital networks evolve, and automation and AI technologies would replace an additional 10,000 positions. He highlighted the significant opportunities presented by AI, mentioning that generative AI large language models would be a transformative leap similar to the advent of smartphones. BT intends to leverage AI to enhance customer service, tailored to individual customer needs, while also exploring other business opportunities. Jansen assured that the company’s multichannel approach, online presence, and physical stores would remain unchanged.
Regarding its financial performance, BT reported a 5% increase in adjusted core earnings, meeting market expectations. However, free cash flow fell by 5% due to increased cash capital expenditure, resulting in lower-than-expected forecasts for free cash flow in 2024. BT plans to invest the proceeds from the British government’s new tax expensing in its network build-out and connecting customers to fibre.
Openreach, BT’s networks arm, reaffirmed its target of reaching 25 million premises with ultra-fast full-fibre connections by the end of 2026. The company expects revenue and core earnings growth on a pro forma basis for the current year.