BT to axe 4,000 jobs after profits plunge – but boss insists firm is back on track after its Italian accounting scandal
Last October the telecoms giant announced write-downs of £145million in its Italian arm
BT is to axe 4,000 jobs as profits plunge but boss Gavin Patterson insists the firm is back on track after its Italian accounting scandal.
Last October the telecoms giant announced write-downs of £145million in its Italian arm.
But an independent investigation later put the figure at £530million — sparking a stock market meltdown.
Releasing its most recent figures yesterday, BT revealed a drop in profits of almost 20 per cent for the year to March 31 at £2.35billion.
But pressed by Sun City as to how the company can move on from the scandal, Mr Patterson said: “We have done a full review supported by KPMG and they have presented a set of recommendations around strengthening controls and processes. We’ve also changed our management team in the division.”
“We’ve done an analysis of other countries around the world that we operate in and confirmed that the set of circumstances that created the fraud in Italy do not exist elsewhere.”
Mr Patterson also vowed to fight the three class- action lawsuits it is facing in the US over the fraud.
He added: “They are not a surprise. We will defend ourselves vigorously against those claims.”
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The fallout has also hit the BT boss in the pocket.
He and the firm’s ex-finance chief have both been stripped of their bonus this year by BT’s pay committee.
Both men said they would not have accepted the bonus had it been awarded, despite playing no role in the scandal.
Meanwhile, BT has announced it is to axe 4,000 mainly back office and managerial roles in its Global Services division.
The restructuring is expected to cost £300million.
The worldwide cuts are part of a plan to reposition BT as a digital outfit less reliant on a physical presence in any one location.
But Mr Patterson insists customers will not be affected.
He added: “We’ve been hiring more and more people in the UK, including an additional 2,000 customer service roles.”
BT’s shares ended the day down 14p at 297p.