BT CEO Warns AI Might Trigger Increased Job Reductions

The CEO of BT has indicated that advancements in artificial intelligence could lead to further job reductions at the FTSE 100 telecom firm, which has already announced intentions to eliminate up to 55,000 positions. Two years prior, the company revealed plans to slash between 40,000 and 55,000 jobs as part of its strategy to transform into a “leaner” operation by the decade’s end.

In a recent interview, CEO Allison Kirkby stated that the current plan, which aims to reduce costs by £3 billion, “did not fully capture the potential of AI.” She noted, “Depending on what we uncover about AI, there may be an opportunity for BT to be even smaller by the decade’s end,” during her discussion with the Financial Times.

As the largest broadband provider in the UK, BT has outlined a vision for workforce reductions, including contractors, by 2030. Philip Jansen, the previous CEO, suggested that the company could operate effectively with a significantly smaller workforce and reduced expenses by that time. Kirkby, who succeeded Jansen last year, has been advocating for a streamlined approach, which includes divesting from its Italian operations and the Irish wholesale and enterprise units, while concentrating on enhancements within the UK market.

Recently, BT separated its international business into its own division, though reports indicate it is open to offers for this segment, as cited by the Financial Times from a source familiar with the situation. Additionally, Kirkby expressed her belief that the valuation of BT’s broadband network business, Openreach, is not accurately reflected in the company’s share price. She mentioned that if this trend continues, BT “would absolutely have to consider options.” She stressed that the appropriate time to reevaluate the potential for spinning off Openreach would be after the company completes the upgrade of its network to full fiber.

Kirkby expressed her preference for the BT share price to accurately reflect the value of Openreach instead of pursuing a spin-off.

It was revealed last week that BT is contemplating a possible acquisition of the telecom and broadband provider TalkTalk. The smaller competitor has approximately 3.2 million customers, though it has faced challenges since its privatization in a £1.1 billion deal with Toscafund, a London-based investment firm, which added £527 million of debt to its balance sheet in 2021.