BT cuts 7,731 jobs as pre-tax profit rises to £1.1 billion

BT Group shares reached a five-year high on Thursday after the company reported a 12% increase in pre-tax profit for the six months ending in September. The profit totaled £1.1 billion, a result that sent stock prices up by as much as 6% during early trading on the London Stock Exchange. This performance made BT one of the top gainers in the FTSE 100 index.

The financial gain coincided with a sharp reduction in the workforce. The company announced that its employee count has fallen to 90,000, a decrease of 7,731 staff since the end of March. This figure excludes employees in the international division, which is being spun off into a joint venture with Verizon. Two years ago, BT employed approximately 130,000 people when contractors were included in the total headcount.

Chief Executive Allison Kirkby, who assumed the role in February 2024, has led the cost-cutting initiative. The group has raised its savings target from £3 billion by 2029 to £3.7 billion by 2030. BT now expects its workforce to stabilize between 75,000 and 80,000 employees by the end of the decade. This target represents the lower bound of the range outlined in 2023, when the company noted that artificial intelligence could eliminate roughly 10,000 roles.

The majority of the recent job losses occurred within the Openreach division. This aligns with a slowing pace in fiber network expansion and a broader effort to eliminate billions of pounds in expenses. Openreach operates the full-fiber network installed in 24.1 million homes, with a target of reaching 25 million by the end of the year. The company told investors on Thursday that demand for this network is at a record level.

Kirkby’s compensation package more than doubled last year, reaching £5.6 million. This is the largest pay award for a BT leader in over a decade. Since she took office, BT shares have risen by more than 70%. Her tenure has also included the £400 million acquisition of TalkTalk, a Salford-based competitor with approximately 900 staff.

Kirkby stated on Thursday that specific details regarding the future of TalkTalk could not be disclosed because the deal remains under regulatory review. The acquisition is described as a rescue deal that secures services for 2.5 million households and public sector clients, including hospitals and schools. Virgin Media O2, which had also expressed interest in buying TalkTalk, criticized the transaction. The rival called the deal a stitch-up that would strengthen BT’s dominant market position.

BT remains the largest broadband provider in the United Kingdom, holding an estimated 30% market share according to Enders Analysis. Openreach serves as the primary supplier for TalkTalk. Virgin Media O2 announced earlier this week that it plans to cut thousands of jobs as part of an £800 million savings drive.