LONDON (Reuters) - BT (BT.L) will cut 13,000 managerial and back-office jobs and move to a smaller London base in the latest attempt by the boss of Britain’s biggest telecoms group to rebuild from an accounting scandal and multiple pressures on its business.
Chief Executive Gavin Patterson said radical action was “absolutely critical” to ensure BT could deliver the next-generation fiber and mobile networks Britain needed.
“We need to make ourselves more efficient, we need to create oxygen within the business,” he told reporters on Thursday.
But a failure to hit a revenue target in the last quarter and a disappointing outlook for no growth in profit for a couple of years sent the shares down 9 percent to five-year lows.
Since he took the top job in 2013, Patterson has spent billions of pounds on TV sports rights, network investment and customer service improvements, all while trying to keep regulators, pension fund trustees and investors on side.
On top of that, fraud was discovered in Italy while the group was also blindsided by a downturn in corporate and public sector markets, undermining confidence in his leadership.
Patterson tried to placate shareholders by maintaining the full-year dividend on Thursday, and he also agreed a new pension funding plan.
Analysts at Bernstein called the earnings report “disappointing.”
“BT has now firmly gone from being a reasonably predictable growth story, an outlier in the incumbent landscape across Europe, to becoming a cost restructuring story,” they said.
“Quite a remarkable shift in fortunes with an outlook that is well shy of our expectations.”
Traders said guidance for the current financial year was lower than expected, while fourth-quarter revenue fell short of targets, showing the challenges facing Patterson as