As it completes its fiber roll-out and adjusts to emerging technologies like AI, BT Group (BT.L), Britain’s largest broadband and mobile provider, will eliminate up to 55,000 positions, including contractors, by 2030 — potentially over 40% of its staff.
Under Philip Jansen’s leadership, the corporation has been implementing a transformation strategy to erect a national fiber network and launch fast 5G mobile services.
The former state monopoly reported pro forma revenue and core earnings growth for the year to the end of March on Thursday for the first time in six years, but the cost of the company’ transformation and the impact to its free cash flow took a toll, sending its shares down more than 8% in early trade.
By the end of the 2020s, according to Jansen, BT would rely on a substantially smaller staff and have a significantly lower cost base because of the completion of the fiber roll-out, digitization of operations, adoption of artificial intelligence (AI), and simplification of its structure.
“New BT Group will be a leaner business with a brighter future,” he declared.
By the group’s financial year 2030, at the latest, the total number of employees would drop from 130,000 to between 75,000 and 90,000. The company currently employs about 30,000 contractors.
By then, the majority of its full-fibre network construction will be finished.
Regarding the full-year performance, Jansen claimed that BT had advanced well while facing a “extraordinary macro-economic backdrop”.
Following the offset of a fall in enterprise, growth in networks and consumer businesses resulted in adjusted core earnings of 7.9 billion pounds ($10 billion), which was 5% higher than market estimates.
However, because of higher cash capital expenditures, free cash flow (FCF) decreased 5% to 1.3 billion pounds, at the lower half of its estimate. Free cash flow projections for 2024 were also lower than experts had anticipated.
According to Barclays, “we anticipate a negative share price reaction on the lower FCF.”
Openreach, the group’s network division, reiterated its goal to provide superfast full-fibre connections to 25 million premises by the end of 2026.
It has made significant investments to expand its fiber network more quickly than competitors Virgin Media O2 and smaller “alt nets”
On a pro forma basis, BT stated that it anticipated growth in both revenue and core profitability this year.
(1 dollar = 0.7923 pounds)