The job cuts will happen despite an increase in its network connection, whereby BT Group reported a total of 8.6 million 5G connections, up 62% last year.
Shares of BT Group PLC (LSE: BT.A) dropped as much as 8 percent on Thursday to trade around £136.85. The sudden drop in the £14.91 billion valued British multinational telecommunications holding company was attributed to the announcement that between 40,000 to 55,000 of its workforce will be reduced by 2030. According to the company, the workforce reduction is set to begin in five years, which will represent between 31-42 percent of its total staff members. Notably, the company intends to cut down both third-party workers and its direct employees.
The company intends to digitize most of its services, which in return will help cut down huge operating costs. As the largest provider of fixed-line, broadband, and mobile services in the United Kingdom, BT Group will significantly streamline its services through the automation of some redundant tasks. Moreover, the information technology sector has significantly been automated throughout the world with the help of artificial intelligence (AI).
“By continuing to build and connect like fury, digitize the way we work, and simplify our structure, by the end of the 2020s BT Group will rely on a much smaller workforce and a significantly reduced cost base. New BT Group will be a leaner business with a brighter future,” BT Chief Executive Philip Jansen said.
BT Group Market Outlook
The announcement came as the company highlighted its financial results for the fourth quarter and the fiscal year that ended on March 31. According to the announcement, the company grew both its pro forma revenue and its EBITDA for the first time in six years. Moreover, the company focused on delivering a quality 5G network across several markets in the past few years.
According to the financial earnings results, BT Group has a total of 8.6 million 5G connections, whereby 62 percent materialized last year. Nevertheless, the company noted that its revenue for the full year came in at £20.7 billion, down 1 percent. As a result, the company reported profit before tax of about £1.7 billion, down about 12 percent from the prior year. BT Group attributed the decline in profit for the financial year that ended March 31 to increased depreciation from network build.
Notably, the company reported a net debt of about £18.9 billion, up approximately £850 million primarily due to pension scheme contributions of £1 billion. Nonetheless, 19 analysts surveyed by MarketWatch gave BT shares an average of Over despite issuing disappointing guidance for the financial year 2024.
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