May 11, 2017

BT lowers guidance; to cut 4000 jobs

BT has lowered its earnings guidance and reduced its outlook for dividend growth to reflect the tough start to the year when it has been plagued by a number of issues notably the accounting scandal in its Italian operation. The company also said it would cut 4,000 jobs in back office and managerial roles over the next two years at a coast of £300m. Luis Alvarez, head of BT's international operations for five years, will leave the company to be replaced by Bas Burger and confirmed reports that management will cede bonuses and miss out on share awards largely as a result of the crisis. BT said that it now expects earnings before interest, taxation, depreciation and amortisation in the current financial year to be as low as £7.5bn compared to £7.6bn in the year to March when it grew 18 per cent but missed expectations of a £7.9bn profit. BT also toned down its dividend growth guidance for the year to "Progressive" from its 10 per cent range. Mr Patterson's total pay for the year dropped to £1.3m from £5.3m in the previous year while Mr Changmugam, who left last year, saw his remuneration fall to £258,000 from £2.8m..

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