BT announce job cuts following 11 per cent profit slide.
BT are reporting revenue up 4 per cent and profits down 11 per cent (before tax) in their second quarter results covering the half year to September 30 2008. The share price surged 11 percent this morning on news that 10,000 jobs would be cut by March 2009 mostly from agency, contract and offshore workers representing a 6% reduction in their global workforce. This is a move to try and reduce costs and head profits back in line during a difficult financial period.
"Three out of our four business units, BT Retail, BT Wholesale and Openreach are delivering on or ahead of target. But profits in BT Global Services are simply not good enough and we are taking decisive action to put matters right. We have appointed Hanif Lalani as the new CEO of BT Global Services and he will continue to grow the business while reducing the cost base."Ian Livingstone (CEO), BT Group
With total revenue at £5,303 million, BT are no force to shun, and they have seen continued growth in both managed solutions convergence, and broadband revenue. The total number of wholesale broadband connections (including LLU) were clocked at 13.3 million on September 30th, with 5.1 million of these being unbundled lines. The quarter saw 258,000 net additions to the broadband services, of which 27% (69,000) belonged to BT Retail keeping them in the number one spot as the UK's largest broadband provider encompassing some 34% of the market (4.6 million customers). BT Vision, the (IPTV) television service that uses your broadband connection has 340,000 customers with 83% of new customers choosing to take a subscription pack, three times as many as last year.
BT Wholesales revenue totalling £1,168 million was hit by a decline of about 7 per cent, an improvement over the first quarter. £39 million of this was put down to migrations from BT services to LLU. Gross profit decreased by 12% to £359 million. Conversely, BT Openreach saw an increase in external revenue up to £237 million, a rise of 14 per cent on last year. This reflects the increase in provisioning of services using LLU and WLR. Total revenue for Openreach was £1,303 million, remaining broadly flat with operating profit of £300 million.
BT's 21st Century Network (21CN) continued roll out and passed 8 per cent of the UK market by the end of September and is reported to be on track to meet 40% in the next 6 months up to April 2009, and 60 per cent by March 2010. Only 8 providers were marketing the new services to customers.