BT calling for massive job cuts

TELECOMS group BT is looking at a cost-cutting plan that would slash its 103,000 workforce.

The company has a long-standing agreement with unions not to impose compulsory redundancies. But it is understood that it plans to improve substantially the terms it offers when persuading staff to leave. The plan might lead to huge payouts for those who agree to go.

City analysts said BT, led by Sir Christopher Bland, could afford to pay the equivalent of three times annual salary and still increase the value of the company for shareholders.

Sources said that packages would probably be less than that. One said: 'BT's problem is to show top-line revenue growth. Even an expensive redundancy programme would be attractive to fund managers because it would prove that it would continue to generate more cash each year as staff costs fell.'

The introduction of a high-tech phone network means many fewer workers will be needed and the company has forecast big savings.

The group has steadily managed to shed about 5,000 staff a year in the past, but its present 'New Start' severance package is seen as less generous and is attracting fewer takers. The slowdown in 'decruitment' - as BT's management jargon puts it - means that hundreds of workers have ended up in 'resource optimisation units'.

'It is like George Orwell's book 1984 where words could sometimes mean their exact opposite,' said one source.

These units are supposed to be places where surplus staff are retrained or wait for redeployment.

But in some cases, they have become virtual prisons where workers sit doing nothing. A few workers are even being paid to 'telecommute' - stay at home and do nothing.

One BT source said a shop steward was effectively being paid by the company to carry out his union work.

City sources say that between 30,000 and 50,000 staff are expected to be surplus to requirements between now and 2009.

One said: 'At present, BT has about 100,000 kerbside green wiring boxes, but the new network will have about 30,000. The implications for engineering staff are fairly obvious, but the effects of the new network are more far reaching. It will have an impact on every part of the company.'

BT hopes that its new computer consultancy and communications arm will soak up some of the job losses, but even bullish observers admit privately that it cannot take up much of the slack.