BT CEO ups cost-cutting plan amid rising inflation and soaring energy costs
- Reference: 1667479360
- News link: https://www.theregister.co.uk/2022/11/03/bt_cost_cutting/
- Source link:
Britain's former state-owned telecommunication biz today outlined results for the six months ended September 30, with revenue up 1 percent year-on-year to £10.4 billion ($11.6 billion) due to growth in Consumer and Openreach. Operating profit for the half-year was up 58 percent to £594 million ($666 million).
CEO Philip Jansen said the company "remains on the front foot in these turbulent times" and that he is "laser focused on modernizing and simplifying BT Group."
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"Given the high inflationary environment, including significantly increased energy prices, we need to take additional action on our costs to maintain the cash flow needed to support our network investments," he added.
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With this in mind, Jansen is upping cost savings targets "from £2.5 billion to £3 billion by the end of FY25." BT embarked on a cost-cutting process in May 2018 when previous boss Gavin Patterson launched the plan to layoff [4]13,000 employees and chopped [5]90 percent of its real estate . The company reached its target of [6]£1 billion gross savings well ahead of target.
The energy crisis in Europe is leading to price rises across the board, and BT said energy overheads went up by £200 million ($224 million) year-on-year.
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The Consumer business was up 3 percent to £4.992 billion ($5.597 billion), and Openreach grew by 5 percent to £2.836 billion ($3.179 billion). The Enterprise and Global divisions both reported declining fortunes.
[8]It's official: UK telcos legally obligated to remove Huawei kit
[9]Vodafone and Three's UK arms locked in merger talks
[10]Consolidation looms for UK broadband providers
[11]BT CEO orders staff: Back to the office or risk 'disciplinary action'
In other highlights, BT said the weekly build rate for FTTP connections was 62,000 in the past three months with more than 8.8 million premises hooked up.
BT also reported that Openreach customer connections were impacted by industrial action to the tune of 40,000, indicating that contrary to BT's own claims, the strike by 21,000 engineers is taking a toll.
As Reg readers know, some 26,000 BT Group staff – also including around 5,000 call center operators – downed tool for eight days in July, August, and October. The dispute revolves around a pay award of £1,500 to BT staff in April, made without consulting the Communication Workers Union (CWU).
The CWU complained the pay rises for 58,000 frontline BT workers was way below inflation, leaving them nursing a pay cut in real terms. BT said it was the highest award given to staff in years, and comes while it is shouldering the cost of rolling out FTTP.
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The last strike date was on October 24 and the [13]union talked of possibly running a fresh ballot to see if more BT employees wanted to join.
The CWU previously highlighted that BT boss Jansen was awarded a 30 percent-plus pay hike in April, taking his package to more than £3 million. ®
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[4] https://www.theregister.com/2018/05/10/bt_to_slash_13000_jobs/
[5] https://www.theregister.com/2019/07/22/bt/
[6] https://www.theregister.com/2021/11/01/bt_update/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y2PzrAEd1Q5ix1lK-w0mjgAAAMo&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2022/10/13/uk_telcos_huawei_ban/
[9] https://www.theregister.com/2022/10/03/vodafone_uk_and_three_uk/
[10] https://www.theregister.com/2022/09/27/uk_broadband_consolidation/
[11] https://www.theregister.com/2022/09/21/bt_ceo_orders_staff_back/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y2PzrAEd1Q5ix1lK-w0mjgAAAMo&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2022/10/24/bt_union_meeting_shareholders/
[14] https://whitepapers.theregister.com/
@wolfetone
"Pay up then."
Terrible idea. The idea of ransoms should be paid would again drag the country down as it has in the past.
Re: @wolfetone
So you'd rather the people working at BT resort to using BT branded foodbanks, rather than being paid an appropriate wage?
Well I guess it's back to Victorian Britain then if that's the case.
"BT said it was the highest award given to staff in years"... "Jansen was awarded a 30 percent-plus pay hike in April, taking his package to more than £3 million"... but he's an important man and deserves to be paid many multiples of the pay of mere workers
Don't forget, as the banner says across the bottom of every BT ad, your BT charges go up by CPI+3.9% every year (April?), so that would currently be 10.1%+3.9% = 14% and possibly another 4% by next April
Revenue for BT until March 2022 was just short of £21Bn.
I am not saying his pay is justified but it does not appear to be hugely out of alignment. The issues of executives pay rises is always thorny as they always appear to be many times larger than what is offered to regular staff. The argument that it is needed to attract and retain "talent" is dubious but whilst everyone is doing it, what else are companies supposed to do?
The big shareholders can always vote against the board pay deals.
Although this isn't a Silicon Valley CEO, he is boss of a monopoly so bound up with regulators he may as well be a civil servant
Morale
Morale in Enterprise is at an all time low. Everyone is looking for other jobs or retiring.
The CEO destroyed decades of good relations with staff and is making a huge mistake by letting so much talent leave.
Anonymous, for obvious reasons.
" National telecom giant admits strike action is impacting customer broadband connections "
Pay up then.