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| BT to shed 10,000 jobs by March | BT to shed 10,000 jobs by March |
| (about 1 hour later) | |
| Telecoms giant BT says it expects to have cut 10,000 jobs by the end of March next year. | Telecoms giant BT says it expects to have cut 10,000 jobs by the end of March next year. |
| The cuts will mainly affect agency and contract staff, including offshore workers, the company said. | The cuts will mainly affect agency and contract staff, including offshore workers, the company said. |
| BT said it had already cut 4,000 jobs, with a further 6,000 to go by March from its global workforce of 160,000. | BT said it had already cut 4,000 jobs, with a further 6,000 to go by March from its global workforce of 160,000. |
| News of the cost cuts sent BT shares up 12% in early trade. The company said the job losses were not a "direct result" of the economic downturn. | News of the cost cuts sent BT shares up 12% in early trade. The company said the job losses were not a "direct result" of the economic downturn. |
| "This is a reflection of the fact we have to become leaner," BT chief executive Ian Livingston told the BBC. | "This is a reflection of the fact we have to become leaner," BT chief executive Ian Livingston told the BBC. |
| It's a real blow especially at this time of year BT employee, South Yorkshire href="/1/hi/business/7727247.stm">BT staff in a state of shock class="" href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=5633">Send us your comments | |
| "We need to do it in good times and bad." | "We need to do it in good times and bad." |
| Many of the job losses will be in the UK, with about 4,000 staff positions affected. | Many of the job losses will be in the UK, with about 4,000 staff positions affected. |
| Workers concerned | Workers concerned |
| Mr Livingston said that he did not expect to make compulsory redundancies. | Mr Livingston said that he did not expect to make compulsory redundancies. |
| Workers nevertheless expressed concern at the announcement and said BT was keeping them in the dark. | Workers nevertheless expressed concern at the announcement and said BT was keeping them in the dark. |
| "I think if the company are going to shed this many UK jobs then it should have informed the staff before we found out on the news," one employee in South Yorkshire told the BBC News website. | "I think if the company are going to shed this many UK jobs then it should have informed the staff before we found out on the news," one employee in South Yorkshire told the BBC News website. |
| "The centre I am in is nearly all agency staff, so where do we stand?" | "The centre I am in is nearly all agency staff, so where do we stand?" |
| "It's a real blow especially at this time of year." | "It's a real blow especially at this time of year." |
| Investors upbeat | Investors upbeat |
| Figures released on Wednesday showed that the UK unemployment total reached an 11-year high of 1.82 million in the three months to September, as more firms cut jobs to cope with the economic slowdown. | Figures released on Wednesday showed that the UK unemployment total reached an 11-year high of 1.82 million in the three months to September, as more firms cut jobs to cope with the economic slowdown. |
| BT's chief executive Ian Livingston says redundancies will not be compulsory. | BT's chief executive Ian Livingston says redundancies will not be compulsory. |
| However, BT's job losses, which will lead to lower costs, cheered investors. | However, BT's job losses, which will lead to lower costs, cheered investors. |
| BT shares were up 11%, or 12.5p, at 125p in afternoon trade on the London stock market. | BT shares were up 11%, or 12.5p, at 125p in afternoon trade on the London stock market. |
| "The group's marked intention to improve profitability could see another turn in investor sentiment, this time upwards," said Keith Bowman, equity analyst at Hargreaves Lansdown stockbrokers. | "The group's marked intention to improve profitability could see another turn in investor sentiment, this time upwards," said Keith Bowman, equity analyst at Hargreaves Lansdown stockbrokers. |
| 'Decisive action' | 'Decisive action' |
| BT said that three of its four main business units were performing well, but said profits at its global services division "were simply not good enough". | BT said that three of its four main business units were performing well, but said profits at its global services division "were simply not good enough". |
| "We are taking decisive action to put matters right," Mr Livingston said. | "We are taking decisive action to put matters right," Mr Livingston said. |
| The firm said it had already replaced the head of the division. | The firm said it had already replaced the head of the division. |
| The job losses come as the firm announced a 11% fall in pre-tax profit for the July to September quarter. | The job losses come as the firm announced a 11% fall in pre-tax profit for the July to September quarter. |
| Pre-tax profits totalled £590m and the firm said revenue rose 4% to £5.3bn. | Pre-tax profits totalled £590m and the firm said revenue rose 4% to £5.3bn. |
| Last month, BT had warned that its global services division, which provides IT networks to multinational businesses, would report lower profits. Its shares fell nearly 20% on the news. | Last month, BT had warned that its global services division, which provides IT networks to multinational businesses, would report lower profits. Its shares fell nearly 20% on the news. |
| Pension | Pension |
| The company revealed that it hoped to save £100m in pension contributions each year when, next April, it brings in radical changes to its final salary scheme, announced earlier this week. | The company revealed that it hoped to save £100m in pension contributions each year when, next April, it brings in radical changes to its final salary scheme, announced earlier this week. |
| The changes will reduce pension entitlement for 65,000 members of the final salary scheme, which was closed to new joiners in 2001. | The changes will reduce pension entitlement for 65,000 members of the final salary scheme, which was closed to new joiners in 2001. |
| The scheme's normal retirement age will rise from 60 to 65, future pension entitlement will build up at a slower rate, the traditional link between final salaries and pension payments will be broken, and some members will have to pay higher contributions. | The scheme's normal retirement age will rise from 60 to 65, future pension entitlement will build up at a slower rate, the traditional link between final salaries and pension payments will be broken, and some members will have to pay higher contributions. |
| The changes are being brought in despite the fact that the BT scheme was still in surplus as of 30 September to the tune of £600m, based on the standard valuation method for company accounts known as IAS 19. | The changes are being brought in despite the fact that the BT scheme was still in surplus as of 30 September to the tune of £600m, based on the standard valuation method for company accounts known as IAS 19. |
| However, a BT spokesman pointed out that it was still paying in an extra £280m a year to pay off a deficit revealed by a previous actuarial valuation three years ago. | However, a BT spokesman pointed out that it was still paying in an extra £280m a year to pay off a deficit revealed by a previous actuarial valuation three years ago. |
| The next full actuarial valuation will be based on the state of the scheme as of 31 December and, depending on the assumptions used about longevity and future investment returns, may show that the scheme would be in deficit but for the impact of the cost-saving measures. | The next full actuarial valuation will be based on the state of the scheme as of 31 December and, depending on the assumptions used about longevity and future investment returns, may show that the scheme would be in deficit but for the impact of the cost-saving measures. |