BT to cut Global Services costs 'significantly' after announcing 13,000 layoffs

One third of the cuts will come in BT's overseas Global Service employee base

The UK's outsourcing firms are continuing to struggle after BT announced it would be slashing 13,000 jobs to save £1.5bn over the next three years.

The restructuring comes after BT's full-year results revealed its revenue declined one per cent year on year during the 12 months ending 31 March 2018 - to £23.7bn - while operating profit was up seven per cent to £3.4bn.

BT's results were hampered by its troubled Global Services business which saw revenue decline nine per cent to just over £5bn, with EBITDA dropping 12 per cent to £495m.

BT said that of the 13,000 job cuts around one third will come overseas in the Global Services division.

As part of the restructuring the firm will abandon its London HQ in favour of 30 "modern strategic sites".

BT CEO Gavin Patterson said: "Decisions like this are not easy. We recognise that it is going to affect a lot of people but ultimately we need to do these things to ensure that we remain a competitive business going forward and that we can benchmark our performance against peer companies."

BT said that the majority of the redundancies will come from back-end roles and mid-management, adding that simplifying its structure will result in "fewer, bigger, more accountable leadership roles".

It will however recruit around 6,000 new employees to "support network deployment and customer service".

Specifically in Global Services BT plans to introduce new digital products and focus more on its top global customers, while "significantly lowering costs".

In a statement BT said: "The next phase of BT's transformation coincides with changes in the telecoms market with exponential growth in data consumption and network capacity requirements and increasing competitive intensity from established companies and new entrants.

"It is critical that BT transforms its operating model to build a lean and agile organisation that delivers sustained improvement in customer experience and productivity."

Fellow outsourcer Capita has also seen no change in fortunes after announcing losses of £513m last month.

Earlier this year market analysts told CRN that the pair are part of a wider trend that has seen larger outsourcing firms struggle to adapt to the challenge from nimbler competitors.