BT issues profits warning, thousands of job losses expected

Telecoms giant BT has issued a profits warning today sending its shares plummeting over 25% to its lowest level since the group floated on the London Stock Exchange in November 1984.

A disappointing performance at its global services unit was blamed for the fall in profits and as a result, Francois Barrault, chief executive of the division, has stepped down and is to be replaced by Hanif Lalani, the group’s finance director.

Group chief executive, Ian Livingston, described the results as ‘particularly disappointing‘ but acknowledged that the performance was unsatisfactory and will take the necessary action to rectify the situation.

The company, which is due to announce its interim results on 13 November, said that its other divisions will deliver results in line or ahead of expectations. However, it warned shareholders there would be no increase in its interim dividend.

In the meantime, the group which has a global workforce of 160,000, is expected to cut thousands of jobs, according to a report in The Telegraph.

However, the company has declined to comment on the extent of job cuts.

Finally, Cazenove analysts has moved BT to ‘underperform’ as the group is likely to remain depressed for some time due to current market conditions.

Story link: BT issues profits warning, thousands of job losses expected