The telco's chief executive, Ian Livingston, has apologised for more than halving the dividend to shareholders, many of whom bought shares on privatisation in the 1980s, after its IT services business plunged the firm deep into the red, reports The Guardian.
Losses at BT Global Services and the need to pump an annual £525m into its huge pension scheme over the next three years have forced BT into a cash squeeze.
As part of a plan to cut operating costs and capital expenditure by more than £1bn, BT said on 14 May 2009 that it will axe 15,000 jobs this year – about 10% of its workforce – on top of 15,000 who left the firm last year, 5,000 of whom went in the first three months of this year alone.
BT refused to say how much of the £1.3bn writedown on its two most troublesome Global Services contracts related to its work upgrading NHS IT systems in London, but it is thought to be the lion's share. The move is believed to cut 50% to 75% off the value of the £1bn NHS contract.
Livingston conceded on 14 May that the performance had been unacceptable but blamed excessive costs and optimistic projections. Underlining the challenge, new health software installed by BT was suspended on the day of its results, following glitches.
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