wave of mive layoffs among British operators

BT offices in Singapore, January 2019.

It’s a dark week for employees in the British telecoms industry. Thursday, May 18, BT Group, the country’s incumbent operator, announced that it wanted to cut 40,000 to 55,000 jobs by 2030, including subcontractors. This represents up to 42% of its current workforce. BT employs around 130,000 people, including 30,000 from subcontractors.

This departure plan is the largest announced by the operator since its privatization and the opening of the sector to competition in 1981. Two days earlier, on May 16, its competitor Vodafone had unveiled a savings plan resulting in 11,000 job cuts over three years, out of a total of approximately 100,000 employees currently.

Looking at its 2022-2023 results, published at the same time as the announcement of the departure plan, BT is not doing so badly. During the 2022-2023 financial year (ended on March 31), BT generated a gross operating margin of 39%, 7 points more than its British competitor Vodafone and 9 points more than Orange, the incumbent operator. French.

Replaced by applications using AI

“Over the past four years we have stuck firmly to our strategy and it is working”even recognizes Philip Jansen, the general manager of the operator who is pleased that the group has “increased pro forma revenue and gross operating income (EBITDA) for the first time in six years”. BT had initiated a cost reduction plan in April 2020: 2.1 billion pounds (2.4 billion euros) of savings have already been made, for a target of 3 billion.

But according to the leader, at the helm of BT since February 2019, the upcoming end of the fixed network transformation plan, from copper to optical fiber, will require less manpower in the future. Another explanation put forward by Philip Jansen: “Whenever there are new technologies, there can be big changes. »

He thinks in particular of perspectives offered by generative artificial intelligence (AI) tools like ChatGPT. Ten thousand of the lost jobs could be replaced by applications using AI, the chief executive said. This is why, according to him, it is necessary “adapt the cost structure and improve productivity”. Before BT, no other major European telecom operator had put forward these arguments to justify a transformation plan of this magnitude. At Vodafone, the 11,000 job cuts responded above all to a logic of savings.

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