BT has unveiled plans to cut costs by an extra £700 million over the next four years, as the telecoms giant reported flat full-year earnings and declining revenues. The company is increasing its cost-saving target to £3.7 billion, up from £3 billion previously, and extending its restructuring programme by a year to the end of March 2030.
Restructuring Costs Rise
The restructuring plan, launched in May 2024, will now cost £1.4 billion in total, compared with the earlier estimate of £1 billion. BT had already announced it would cut up to 55,000 jobs worldwide by 2030. To date, the group has achieved annual savings of £1.5 billion, including £580 million in the past 12 months to March 31. The workforce has shrunk by another 7% to 108,000 staff over the year.
Chief executive Allison Kirkby stated that while the firm is not axing more staff than originally expected, the additional cost cuts will likely result in the total workforce ending up at the lower end of the forecasted range of 75,000 to 90,000 by 2030. This is down from 130,000 workers, including contractors, in 2024.
Financial Performance
Underlying earnings remained flat at £8.23 billion in the year to March 31, while underlying revenues fell 4% to £19.65 billion. UK service revenues declined 1% despite price rises. On a statutory basis, pre-tax profits rose 8% to £1.44 billion. The group forecasts further revenue declines in the year ahead, with a range of £19 billion to £19.5 billion, while earnings are expected to edge higher to between £8.2 billion and £8.3 billion.
UK service revenues are predicted to come under further pressure, with BT forecasting a range of £15.1 billion to £15.4 billion for 2026-27, against the £15.4 billion reported in the past year.
Openreach and Consumer Division
Openreach has faced customer losses due to low-priced competitors, such as CityFibre. However, BT's consumer division returned to customer growth across broadband, mobile, and TV during the year. Full-year results showed the firm lost fewer customers than feared, down 825,000 across Openreach broadband, compared with 828,000 shed in 2024-25. It lost 203,000 Openreach customers in the fourth quarter, down from 210,000 in the previous three months, and expects to lose another 800,000 in 2026-27.
Ms Kirkby commented: “We have delivered on our financial guidance and we are transforming ahead of plan, offsetting headwinds while successfully competing.”
International Business and Shareholder Returns
Ms Kirkby has also been considering a possible stake sale in its struggling international business, with recent reports suggesting a revival of these plans to refocus on the domestic UK market. BT has been gradually reducing its overseas business, recently selling off its troubled Italian operation and previously agreeing to sell its Irish wholesale and enterprise business unit.
Shares fell 3% after the full-year figures, despite a 2% shareholder dividend increase and refreshed plans for future investor payouts.
