BT reports £1.28 billion loss

BT has been forced to announce plans to cut 15,000 job this year as it reports a £1.28 billion loss for the last three months.

The telecoms company will lose around 10% of its workforce over the coming year after being pushed into a £134 million annual loss.

BT has also cut its dividend to shareholders and admitted that the global recession has had a massive impact on its £29 billion pension fund, which is the largest private sector pension scheme in the UK with 360,000 members.

As a result, BT will need to increase its annual payments to £525 million over the next three years, up from the current level of £280 million, to fill the gap in the scheme.

BT said it will aim to cut operating costs and capital expenditure by more than £1 billion this year to cover its increased pension contributions and make up for the company’s IT business’ poor performance.

BT Global Services made an operating loss of £198 million in the year to the end of March, on revenues of £2.36 billion.

BT warned that it expects revenues to decline by 4% or 5% this year, mainly due to the problems at Global Services.

The company will be axing around 15,000 jobs in a bid to cut costs across the board, a similar amount to the number of redundancies it made last year – which were a third more than had originally been expected.

BT, which imposed a pay freeze to all staff earlier this year, is also slashing its dividend to shareholders – the company announced a final dividend of 1.1p, which is a full year payout of 6.5p compared with 15.8p last year.

“Three out of four of BT’s lines of business have performed well in spite of fierce competition and the global economic downturn,” said chief executive Ian Livingston. “However this achievement has been overshadowed by the unacceptable performance of BT Global Services.”