BT Cuts 4,000 Jobs and CEO Bonus as Profit Falls -- 2nd Update
11 May 2017 - 8:47PM
Dow Jones News
By Rory Gallivan
LONDON-- BT Group PLC, reeling from an accounting scandal at its
Italian business and other issues, said Thursday it would cut 4,000
jobs and pay no bonus to its chief executive.
The telecommunications and television provider, one of the
U.K.'s best-known companies, said the moves come as it accelerates
cost cuts in areas including global services, which provides
communications services to businesses around the world.
BT shares were down 3% in morning trading in London.
The global-services business includes BT's Italian operations,
which were responsible for a GBP530 million ($684 million)
write-down after the discovery of yearslong "improper" accounting
practices and transactions. They led to the suspension of several
executives who have since left the business.
Chief Executive Gavin Patterson said a review of global services
found BT no longer needs to own so many assets around the world.
Global services accounts for nearly a quarter of BT's revenue, with
the rest mainly coming from fixed-line, cellphone, internet and TV
services in the U.K. BT owns much of the U.K.'s telecommunications
infrastructure, a legacy from being the state-owned telecom
monopoly until the 1980s.
The company said Mr. Patterson and outgoing finance director
Tony Chanmugam won't receive a bonus for the year ended March 31.
The pay decision followed the problems in Italy in addition to
issues related to the U.K. infrastructure business Openreach and
other challenges, the company said.
Mr. Patterson will receive GBP1.3 million for the period, down
from GBP5.3 million the previous year, while Mr. Chanmugam's total
payment falls to GBP258,000 from GBP2.8 million.
BT said it also will wring savings out of the technology,
services and operations division, which operates its networks,
platforms and information-technology systems.
The company reported pretax profit of GBP440 million in the
three months to end-March, down 48% from GBP845 million in the same
period the previous year, on a 9.9% rise in revenue to GBP6.12
billion.
The final dividend rises 10% to 10.55 pence a share. BT said
dividend growth will be lower in the current year.
BT also trimmed its current-year forecast for earnings before
interest, taxes, depreciation and amortization to a range of GBP7.5
billion to GBP7.6 billion, against a previous prediction of around
GBP7.6 billion.
Write to Rory Gallivan at rory.gallivan@wsj.com
(END) Dow Jones Newswires
May 11, 2017 06:32 ET (10:32 GMT)
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