BT is axing 4,000 roles and has stripped its CEO of his bonus following a "challenging year".
Its fiscal year ending 31 March was a year to forget for BT as it took a £245m charge relating to an accounting imbroglio at its Italian operation and a £42m fine from Ofcom for regulatory breaches at its Openreach arm.
BT also lamented headwinds in the UK public sector and international markets as reported profit for the year slumped 19 per cent. Reported revenues rose 27 per cent to £24.06bn, but only thanks to its acquisition of EE - stripping that out, sales fell 0.2 per cent.
Citing these issues, BT's Remuneration Committee have opted not to dish out a bonus to Patterson, meaning his total pay packet has shrivelled from £5.28m to £1.34m year on year.
Patterson will at least still be in a job, which is more than can be said for many of BT's other staff. Some 4,000 roles in Global Services, as well as its Technology, Services and Operations divisoin and Group Functions, will be cut to offset "market and regulatory pressures and support investment".
Global Services is also intent on developing a more "digital" business and investing heavily in cloud-based platforms under its newly appointed CEO Bas Burger, who will take over from incumbent Luis Alvarez on 1 June.
"Technology trends mean that we are now less dependent on owning physical local network assets around the world, creating the opportunity to reposition Global Services as a more focused digital business," Patterson explained. "We are therefore restructuring our Global Services organisation to enable this strategic refocusing."
Patterson admitted it had been a "challenging year", adding that BT is taking the Ofcom and Italian issues "extremely seriously".
"Learning from the challenges of this year will make BT a stronger company for the future," he said.
Paolo Pescatore, a vice president at analyst CCS Insight, argued that BT should have some cause for optimism.
"Overall, it has been a tough year for BT," he said. "The Italian scandal coupled with the Ofcom have hit the company quite hard. Furthermore it has had to deal with a barrage of pressure from rivals for an independent Openreach. Finally, a deal with Ofcom regarding Openreach has been agreed it now has some regulatory certainty to continue investing for the future. And it now has a significant mobile business with EE which it can leverage without having to depend on other areas."
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