BT Group Plc has unveiled its plans to significantly reduce its labor force by up to 42% over the next seven years, a move that will affect both employees and contractors. The total number of workers, including third-party employees working on BT's behalf, is expected to decrease from approximately 130,000 currently to between 75,000 and 90,000 by the fiscal year ending in March 2030.
Chief Executive Officer Philip Jansen has been discreetly reducing the workforce for the past five years while focusing on profit growth. The company aims at achieving savings of £3 billion a year by the end of 2025. Following this announcement, shares fell by 1.5% to reach148.10 pence in London trading on Wednesday; however, stocks have risen by an impressive32% so far this year.
The telecom giant intends not only to minimize its global workforce but also expand on digitalization efforts and capitalize on emerging technologies such as artificial intelligence (AI). As it stands now,BT employs around130,000 staff members worldwide.
Despite reporting a12% dropin pre-tax profits amountingto £1.7bnforthe yeartothe endofMarch,the company remains determinedtoreach£3bnin annualizedcostsavingsby2025.Vodafonealso recentlyannouncedplans tomakesubstantialjobcuts,reducingitsworkforceby11,000overthenextthreeyears—thelargestreductioninthetelecomfirm'shistory.
As part of their strategic plan for cost reduction and simplification,BTGroup(BTGOF)anticipatestheeliminationofupto55,000jobsinthecomingfive-tosevenyears.CEOPhilipJansensharedthat"bytheendofthe2020sBTGroupwillrelyonamuchsmallerworkforceand asignificantlyreducedcostbase."Thismovecomesasthecompanystrivestoadaptonanincreasinglydigitalera,embracingtechnologicaladvancements,andoptimizingitsbusinessmodel.