BT is to shut offices in more than 270 locations across the UK as the telecoms company seeks to cut £1.5bn in costs.
The company is to cut the number of locations across the UK where it has offices to 30, a reduction of more than 90% in its UK property footprint. The company has announced the first eight locations for its UK workforce, which is being whittled down to about 75,000.
London, Manchester, Cardiff, Edinburgh, Belfast, Bristol, Ipswich and Birmingham have been named as “key locations” for BT maintain a presence.
Last May, BT announced plans to cut 13,000 jobs over three years, and move out of its central London headquarters after almost 150 years, to cut £1.5bn in costs after a torrid 18 months. In May, BT’s share price hit its lowest level since 2011.
BT is closing in on a £200m-plus deal to sell its London headquarters in St Paul’s, where it has been since 1874 when the group was known as the General Post Office, with the preferred option for a new London base in a development in nearby Aldgate.
In 2001, BT moved to sell the bulk of its property estate, about 6,700 offices and telephone exchanges, to raise £2.4bn to pay down a £30bn debt mountain. Under the deal, BT agreed to lease back the property for 30 years with hefty annual rent payments.
Last month BT’s new chief executive, Philip Jansen, who took over from Gavin Patterson in February, unveiled an initiative to give employees £50m in shares annually as part of a new scheme to boost morale and rebuild the telecoms group’s image.
Jansen’s move followed a tough couple of years for BT, which has included an Italian accounting scandal and a profit warning that stripped billions off its market value.
About two-thirds of the job cuts announced in May last year will fall on its UK workforce of about 83,000, with the remainder coming from the 23,000 staff it employs internationally. BT has already made thousands of the cuts, incurring £386m in restructuring charges in the year to the end of March, a 60% year-on-year increase, “primarily relating to leaver costs”.
BT’s unions have raised concerns that the job cuts appear to be an “out with the old, in with the new” strategy targeting the company’s long-serving staff.