May 31, 2023

Unitranche

Supportive Business Potential

Live news updates from December 16: Goldman to sack up to 3,900, French nuclear reactor delayed

Live news updates from December 16: Goldman to sack up to 3,900, French nuclear reactor delayed

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Britain’s largest telecoms group is to reorganise its business, combining its global and enterprise divisions into a new unit called BT Business, as it seeks to cut costs and revive some of its poorer performing units.

The creation of BT Business will produce £100mn in cost savings by 2025, by allowing it to cut management and support roles as well as product portfolios, the group said.

The former monopoly hopes that the unit merger will remove duplication and enable it to offer a single interface to both corporate and public sector customers.

The move comes after several consecutive quarters in which the group’s enterprise division — which accounts for about a quarter of group revenues — struggled, with adjusted earnings before interest, tax, depreciation and amortisation dropping by 23 per cent in the first six months of the financial year, to £660mn.

The global division was also a drag on group performance, with adjusted ebitda dropping five per cent over the same period, to £197mn.

BT, which employs nearly 100,000 people, recently said it had increased its 2025 target for cost savings by a fifth, from £2.5bn to £3bn, and that it may have to axe staff. “Inflation is pushing us hard,” said BT’s chief executive Philip Jansen during last month’s half-year results.

After the restructure, the group will be left with three customer-facing segments — consumer, supporting British customers; BT Business, supporting business and public sector customers; and Openreach, its networking division that provides broadband infrastructure to companies such as Sky and TalkTalk.