BT Group targets £3bn more cost cuts by 2029 amid renewed UK focus

BT has announced a further £3 billion in cost cuts over the coming years, as new chief executive Allison Kirkby expanded on plans to turn around the struggling telecoms giant.

Ms Kirkby said the company had hit its initial target of £3 billion in savings a year before schedule, and said it would slash the same sum by 2029.

It comes as pre-tax profits fell 31% to £1.18 billion last year, mainly down to a £488 million accounting charge, while revenue rose 1% to £20.8 billion.

The FTSE 100 company said recent price increases for broadband customers, which have attracted criticism over the last year, had helped bolster revenues.

However, it also lost 491,000 Openreach customers in the 12 months ending March 31, amid slower-than-anticipated growth in the wider broadband market.

BT has come under pressure lately, amid plans to aggressively roll out its full-fibre broadband network across the UK while also cutting tens of thousands of jobs and slashing costs across the firm.

Ms Kirkby took over to turn the business around in February, and today laid out her intention to double its already-mammoth efforts to reduce overheads.

The plan has already involved cutting 10,000 jobs, bringing BT’s headcount to 120,000 people.

The company is aiming to slim down to between 75,000 and 90,000 workers by 2030, as previously announced, and said that job cut plans would not change with the further £3 billion in planned savings.

Instead, BT will focus more on the UK market, and ramp up efforts to digitise, simplify and “reskill” its workforce and business operations.

Ms Kirkby did not rule out selling off some of BT’s international business arms, saying the company is “exploring a number of options for all of our international footprint”.

BT shares rose 9% in early trading.

It comes after investors placed a record £300 million in stock market bets against the group.

Canada Pension Plan Investment Board and BlackRock Investment Management, along with hedge funds including AKO Capital and Kintbury Capital, have all shorted the FTSE 100 company’s stock, according to public disclosures.

Investors short stocks when they believe a company’s share price is likely to fall, borrowing the stock and selling the shares, with the intention of buying them back at a lower price to make profit. The hedge funds’ short positions mean they think BT’s share price will fall.

Ms Kirkby said the firm had hit a turning point in the broadband rollout, having now built fibre broadband in 14 million homes, and started building on a further six million, as part of a plan to reach 25 million homes by late 2026.

She said the business had passed the point of peak spending on the infrastructure expansion, which it carries out via its subsidiary Openreach.

Ms Kirkby said BT will hike its dividend to shareholders by 3.9% to 8p per share.

She said: “As we move into the next phase of BT Group’s transformation, we are sharpening our focus to be better for our customers and the country, by accelerating the modernisation of our operations, and by exploring options to optimise our global business.

“This will create a simpler BT Group, fully focused on connecting the UK, and well positioned to generate significant growth for all our stakeholders.”