BT's share price fell nearly 10 per cent this morning as the telecoms giant revealed plans to cut 13,000 jobs and quit its London headquarters as the telecoms giant looks to cut costs.
The jobs - mainly back office and middle management roles, two-thirds of which are UK-based - will be lost over the next three years, and forms part of a major new three-year strategy to "reshape the business to meet the demand for converged products".
The three pronged approach - which the business will invest £3.7bn annually to realise - aims to deliver "differentiated" customer experiences, increase investment in integrated network leadership and accelerate the transformation of its operating model.
BT is focusing on investing ultrafast broadband and to lead in 5G.
As a result, BT is looking to cut £1.5bn in gross costs from the business, which it will do by cutting 13,000 "mainly administrative and managerial roles". The firm said this would be offset by recruitment in 6,000 front line engineers, customer service and cyber security experts.
BT is also reducing its property footprint, which includes leaving the firm's London headquarters and making other "non-core disposals and by modernising our supplier arrangements".
BT said the move out of St Paul’s formed part of a plan to cut the number of locations it owns across the UK. Chief executive Gavin Patterson said about 80 per cent of its staff were based in around 50 offices across the UK.
That number will be cut to 30 “modern, strategic sites to create a more collaborative, open and customer-focused working culture”.
“In many cities we have multiple offices, it is about consolidating in key towns,” said Patterson. “We will certainly have a headquarters in London; this is not BT moving out of London. It is more likely to be in a smaller, future-oriented working environment.”
It comes as BT reveals year results that were broadly in line with expectations, allowing the firm to maintain the dividend for this year and the subsequent two years.
Revenues in the last quarter fell three per cent to £5.97bn, just missing analyst expectations, although EE and Openreach were praised as having offset volatility in other businesses.
BT's reported pre-tax profits were £872m while adjusted EBITDA rose one per cent to £2.1bn
BT has also confirmed it will make three payments of £2.1bn over the next three years as it looks to reduce the £11.3bn pension deficit. This is in line with the existing arrangement struck in 2014.
Patterson said: "BT delivered a solid set of financial results in the fourth quarter, with growth in our consumer divisions offset by declines in our enterprise businesses, due to both challenging market conditions and our decision to exit lower margin business."