BT is expected to announce this week that it is hugely expanding its super-fast broadband network. But it will also reportedly reveal it has cut 35,000 jobs in the last two years.
The planned reach of the next generation broadband network will be extended from 40% of UK homes to 66%, it was reported by the Financial Times. This would raise costs above the existing budget of £1.5 billion.
But analysts told the publication that it would be difficult for BT to make a return on investment unless rival telecoms firms rent usage of the infrastructure.
Meanwhile, BT is expected to announce it has cut 35,000 jobs in the last two years, some 5,000 more than observers originally expected. Many of the cuts are thought to have been among temporary or agency workers. Concerns also remain about a £9 billion hole in the company’s pension fund.
The company will reportedly announce a return to profit, of up to £1.1 billion, after making a loss last year owing to a £1.6 billion writedown in the value of its IT services division. BT Global Services had overestimated the income due from a number of contracts, reportedly including deals with the NHS and Thomson Reuters.
BT will place an increased focus on improving profits at the Global Services division, the Sunday Telegraph reported, with a focus on fast-growing Indian and Chinese markets. In January, BT appointed Jeff Kelly, former head of EDS’ US business, as chief executive of the Global Services division, and tasked him with improving its financial performance.
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