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UK telecoms group BT to cut 4,000 jobs in restructuring after "challenging year"
[LONDON] BT said on Thursday it would cut 4,000 jobs in its Global Services unit that serves multinationals and scale back its dividend growth ambitions in a drive to recover from an accounting scandal and a profit warning.
The scandal in Italy in January, combined with a profit warning stemming from a slowdown in the work it does for governments, sent BT's shares plunging at the time, wiping £8 billion (S$14.6 billion) from the company's value.
The telecoms group described the year as "challenging" as it reported fourth-quarter revenue of £6.12 billion, up 10 per cent, and adjusted earnings of £2.07 billion, up 2 per cent and broadly in line with forecasts.
On an underlying basis excluding transit, revenue was broadly flat for the year, in line with guidance.
BT said the review of Global Services, which will cost it £300 million, would improve its financial performance and the long-term value it delivers to BT.
The jobs cuts would come in managerial and back office areas in a restructuring designed to simplify the business, it said.
Following the accounting scandal, Chief Executive Gavin Patterson and former Group Finance Director Tony Chanmugam will not receive a bonus for the 2016/17 financial year, the company said.
"This has been a challenging year for BT," Mr Patterson said on Thursday.
"We've faced headwinds in the UK public sector and international corporate markets and must learn from what we found in our Italian business."
It paid a final dividend of 10.55 pence, up 10 per cent, but said dividend growth in 2017/18 would be lower than the 10 per cent it had previously targeted.