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- BT shares fell more than 7% on Thursday as it cut its sales forecast.
- BT also said it had cut another 2,000 jobs amid a cost-cutting plan.
BT could raise prices after the Budget imposed another £100m on the telecoms giant’s tax bill, the group’s boss said on Thursday.
Chief executive Allison Kirkby said the group would work “harder and faster” on cost-cutting efforts to help counter the rising tax rise planned for next year due to the Government’s decision to increase contributions to employers’ national insurance.
Kirkby said this would include a review of prices charged to customers, along with savings in the supply chain.
Greater use of artificial intelligence and automation will also be employed to improve productivity, he added.
Cost cutting: BT boss Allison Kirkby said the group would work “harder and faster” on cost-cutting efforts.
BT joins the likes of Sainsbury’s, which also exposed its Budget tax bill on Thursday, as well as Marks & Spencer and Primark owner Associated British Foods in revealing the impact of the changes in NI.
Kirkby said: ‘It is a new inflationary pressure that we have to suffer in our business.
“We will move faster and faster in the cost transformation and in the plans we have already outlined,” he added.
He added that as part of the measures, the group would “watch our prices in relation to input inflation.”
The revelation came as BT cut its annual sales outlook and revealed that another 2,000 jobs have gone under its ongoing plan to radically cut costs.
The group reported a 10 per cent drop in pre-tax profits to £967m for the six months to September 30, while revenue fell 3 per cent to £10.1bn amid a “ competitive retail environment.”
Update: BT has cut its annual sales outlook and revealed a further 2,000 jobs have been cut under its current cost-cutting plan.
It expects annual revenue to fall by 1 to 2 percent, blaming non-UK trading and reductions in sales of less profitable kits, while also pointing to weaker performance in the public and corporate sector. BT had previously forecast revenue to rise by up to 1 per cent in 2024-25.
But the company left its underlying profit guidance unchanged, at around £8.2 billion.
The company also laid bare the pace of its previously announced job cuts, which will be reduced from 130,000 when the plan was first outlined in 2023 to between 75,000 and 90,000 workers by 2030, as it seeks to shave billions off its cost basis.
It said it reduced its workforce by just over another 2,000, or 4 per cent year-on-year, to 118,000 and saved £433 million in annual costs in the first half alone.
Kirkby said the group was also considering selling or splitting its international arm, which the group has been separating from the rest of the business.
He said the company maintained a “positive dialogue” with other parties about BT Global.
“We are looking at a variety of scenarios to optimize that business,” he said.
bt stock fell 7.21 per cent or 10.25 pence to 131.85 pence on Thursday, having risen around 6 per cent in the last year.
Kirby took on the top role in February with the aim of turning around the business and redoubling cost reduction efforts and aggressively rolling out its full fiber broadband network across the UK.
In May, the group announced a further £3bn in cost cuts over the coming years, as Kirkby expanded its plans to turn around the struggling telecoms giant.
He said at the time that the company had reached its initial target of £3bn in savings a year ahead of schedule, and said it would cut the same amount by 2029.
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