BT TO SHED 4000 JOBS AND STRIP CHIEF EXEC OF ANNUAL BONUS AFTER A TORRID YEAR

BT is to shed 4,000 jobs worldwide over the next two years and is stripping the chief executive of his annual bonus. The telecoms giant said the job cuts would fall on back-office and managerial sectors as it simplifies its Global Services operations.

The shake-up follows an accounting scandal at the Italian part of Global Services that cost BT more than £500m.

BT boss Gavin Patterson and now-departed finance chief Tony Chanmugam will lose bonuses over the scandal.

Both men understood the decision and would not have accepted a bonus if it had been approved, BT said.

According to BT’s 2016 annual report, Mr Patterson was paid a basic salary of £969,000 that year and was awarded bonuses worth £4m.

In January, BT was forced to write down the value of its Italian unit after years of overstating profits.

‘Challenging year’

The head of the Global Services division, Luis Alvarez, is being replaced by Bas Burger. It has already been announced that Corrado Sciolla, head of continental Europe, is stepping down over the affair.

BT said it wanted to “reposition Global Services as a more focused digital business”, as technology trends meant it was less dependent on owning physical network assets around the world.

The announcements came as BT disclosed that its annual pre-tax profits fell 19% to £2.35bn in the year to March.

“This has been a challenging year, but BT remains well positioned for the future,” the company said.

“Our strong businesses, underlying operational performance and financial returns show BT has the strength and breadth to withstand setbacks.”

It added that the results were broadly in line with the revised outlook that it issued in January, and that it intended to continue to increase its dividends to shareholders.

‘Still cautious’

“It’s been a pretty torrid time for BT management and shareholders of late and there is not a lot of good news in today’s full-year earnings report,” said Neil Wilson, senior market analyst at ETX Capital.

“A run of bad news means BT is still cautious and it expects little improvement to earnings and free cash in the coming year.

“Removing boss Gavin Patterson’s bonus is aimed at assuaging investor anger, but shareholders won’t be that impressed. His pay is down £4m, small fry in the ocean of BT revenues.”