BT slashes workforce as Talktalk takeover adds to turnaround challenge

BT reduced its workforce by 11 percent as chief executive Allison Kirkby continues to implement changes to the telecommunications company, following its rescue of struggling rival TalkTalk from administration. The workforce, including contractors, fell to 90,000 over the past year, resulting in £312 million in annual savings as the company aims to streamline operations and cut costs.

Pre-tax profits increased 12 percent to £1.1 billion in the six months ending September, despite revenue growth of just one percent to £8.8 billion. BT's workforce is projected to shrink to between 65,000 and 70,000 by 2030, excluding international operations. However, the company's financial situation remains challenging. Cash available after running and investing in the business decreased 59 percent to £236 million, while debt increased by £1 billion to £21 billion.

BT is now integrating TalkTalk's consumer and wholesale businesses, acquired after the broadband provider failed to find a buyer. The deal is expected to cost BT around £400 million this financial year, and the company is now responsible for services used by 2.5 million TalkTalk customers. Allison Kirkby cited the company's UK-centric strategy and transformation, noting the achievement of £312 million in annualized savings in the first half.

Openreach, BT's broadband infrastructure arm, reported record demand for its full-fibre network, with over 10 million homes and businesses connected by October. This milestone comes as the British broadband market faces increased pressure from intense competition and the substantial debts accumulated by companies racing to build rival fibre networks.