BT says it will 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. David Pollard reports.
The revolving doors spin at BT. Four thousand jobs to go in its Global Services unit that serves multinationals. It's part of a 300 million pounds effort to improve financial performance. After a year that's seen a difficult decision over its broadband network division, Open Reach. And the telco mired in an accounting scandal that broke in January in its Italian unit. That, plus a profit warning wiped eight billion pounds off its market cap. (SOUNDBITE) (English) FIDELITY INTERNATIONAL, INVESTMENT DIRECTOR, TOM STEVENSON, SAYING: "It knocked the value of the company severely and knocked its reputation even more. It's also had issues with its Open Reach arm which it's had to extract from the rest of the company. It received a fine for failings in that business. So it's had those problems, and in addition to that, trading has been extremely competitive as well." The cuts are to come in managerial and back office areas in a restructuring designed to simplify the business. Now, it's reporting Q4 revenues at just over six billion pounds - up ten per cent - with earnings atQtwo billion pounds - an increase of just two per cent. Final dividends are also up by a tenth - but dividend growth in the next financial year will be lower, it warns. And, following the scandal, chief exec Gavin Patterson won't receive a bonus. For what the group says was a 'challenging' year.