BT workforce shrinks by nearly 8,000 as cost cuts boost profits

BT has reduced its employee count by almost 8,000 since the end of March while implementing a comprehensive strategy to lower operational costs across the organization. The telecommunications group announced that its staff numbers have dropped to 90,000, a decrease of 7,731 employees. This figure excludes personnel in its international division, which is being separated into a joint venture with the American telecoms firm Verizon. Two years ago, the company employed approximately 130,000 people when contractors were included in the total headcount.

The majority of these job reductions have occurred within the Openreach division. This aligns with the slowing pace of its fiber network expansion and a broader initiative designed to eliminate billions of pounds in expenses by the year 2030. Despite the significant workforce reduction, the company reported a 12% increase in pre-tax profit on a year-on-year basis. The profit reached £1.1 billion for the six-month period ending in September.

Investors responded positively to the financial results. BT shares, which are traded on the London Stock Exchange, surged by as much as 6% during early trading on Thursday. The stock touched a five-year high, making it one of the top performers within the FTSE 100 index. This positive reaction underscores the market’s approval of the company’s aggressive cost-saving measures.

Allison Kirkby, who joined the BT board and subsequently became chief executive in February 2024, has led the cost-cutting program. During the current year, she announced that the company would elevate its savings goal from £3 billion by 2029 to £3.7 billion by 2030. The group now anticipates that its workforce will stabilize between 75,000 and 80,000 employees by the end of the decade. This target sits at the lower end of the 75,000 to 90,000 range outlined in 2023, when the company noted that the integration of artificial intelligence could lead to the elimination of roughly 10,000 roles.

Kirkby’s compensation and bonus package more than doubled last year, reaching £5.6 million. This represents the largest pay award for a leader of the telecoms company in over a decade. Since she assumed her role, BT shares have increased by more than 70%. Her leadership has also managed the £400 million acquisition of its smaller competitor, TalkTalk, which is currently facing financial difficulties.

On Thursday, Kirkby stated that she could not disclose specific details regarding the future of TalkTalk because the deal is still undergoing regulatory review. TalkTalk is based in Salford in Greater Manchester and employs approximately 900 staff members. The acquisition was described as a rescue deal that ensures telecommunications services for 2.5 million households and key public sector clients, including hospitals and schools.

Virgin Media O2, which had also expressed interest in purchasing TalkTalk, reacted with displeasure to the transaction. The rival company labeled the deal a stitch-up, arguing that it would further strengthen BT’s dominant market position. BT remains the largest broadband provider in the United Kingdom, holding an estimated market share of about 30% according to Enders Analysis. Openreach, the network owned by BT, serves as the primary supplier for TalkTalk.

The company informed investors on Thursday that there is record demand for the full-fiber network operated by Openreach. This network has been installed in 24.1 million homes to date, with a target of reaching 25 million by the end of the year. Earlier this week, Virgin Media O2 announced its own plans to cut thousands of jobs as part of an £800 million savings drive.

The developments at BT highlight the intense competitive pressure within the UK telecommunications sector. As companies seek to optimize efficiency and manage costs, workforce adjustments have become a central part of their strategic planning. Investors appear to be rewarding these efforts with higher share valuations, despite the significant changes in employment levels.