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10,000 jobs axed at BT as 1000 bankers go too
Nick Goodway, City Correspondent13 Nov 2008
BRITISH Telecom axed 10,000 jobs and more than 1,000 City bankers were facing unemployment tonight as the full impact of the economic downturn took hold.
The communications firm will get rid of 7,000 workers in Britain and another 3,000 across the world, with analysts warning that more will follow throughout the economy.
Meanwhile, Royal Bank of Scotland and Morgan Stanley are cutting about 750 and 250 investment banking jobs respectively in the latest round of City redundancies.
RBS, owner of NatWest, is cutting 15 per cent of its 20,000-strong global banking and markets division in the next few days while Morgan Stanley is moving to cut 10 per cent of its worldwide investment banking workforce.
The dramatic scale of the BT cuts — mostly among agency and contract workers — came in a week which has already seen 5,000 jobs go in big businesses. Hi-tech industries have taken the brunt of the downturn, with Virgin Media, Yell and Vodafone all shedding jobs this week.
Analysts said today that mass unemployment is now a serious threat to the economy, with the total number of jobless increasing rapidly.
According to some predictions as many as three million could be out of work by next year.
Dr Gerard Lyons, chief economist and head of global research at Standard Chartered bank, said: “Clearly there will be more job losses to come. Our guestimate is that unemployment will rise to about 2.5 million.
“If you're running a company and you've got reduced sales, tighter cashflow and you're pessimistic about the future, of course you are going to shed staff.”
The BT move follows an unexpected profits warning last month and yesterday's news that unemployment in Britain had risen to its highest level for 11 years with 1.83 million people out of work.
BT said it had already cut 4,000 jobs since April and the remaining 6,000 posts would go by March.
It has a global staff of 160,000 and expects to make most of the cuts in its direct workforce by not replacing staff who leave.
Chief executive Ian Livingston said the cuts were part of an ongoing efficiency programme. He said: “This reflects the fact that our prices have been falling every year for several years. But we also anticipated reasonably early on that economic conditions were worsening.”
The cuts precede talks between Gordon Brown and world leaders in New York this weekend over the global economy.
A spokesman for RBS said the scale of its cuts has not been finalised: “We constantly review our operating model to make sure that it is appropriate to the market condition and take action accordingly.”
It is understood that redundancies at RBS are likely to happen within the next four weeks.
American banking giant Morgan Stanley said: “The firm is resizing its cost base and headcount to match current opportunities in the marketplace.”
An estimated 6,000 people work for Morgan Stanley in London, of which about half are thought to be in investment banking.
Reader views (4)
Pundits claim that the number of unemployed is likely to rise to 2 million, overlooking the fact that the real figure is already higher than this.
When Billy Liar came to power, millions were transferred from unemployment benefit onto incapacity benefit and myriad other pointless, statistics-massaging schemes.
Gordon Clown claims to have created 1.5 million jobs, but 800,000 of those have been created in the public sector and most of them are non-jobs that we were previously doing perfectly well without. Also, of these 1.5 million jobs, well over half of them have been taken by immigrants.
Brush aside the smoke and break the mirrors and the real figures will show that the unemployment figures are worse now than they ever were in the disastrous aftermath of the last time that Labour were in power.
Wilson/Callaghan would be proud of the mess that Bliar/Brown have made in upholding Labour's finest traditions!
- Keith Lonsdale, Doncaster, 14/11/2008 09:24
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BT could easily fire more employees, like the BT idiot(s) responsible for the charge of 59p on our latest BT phone bill for a call lasting 0:00:00 seconds.
- Ralph, GB, 13/11/2008 15:43
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And even more people will move away from BT as it become even harder to talk to someone if you have a problem (sorry I should say when you have a problem).
They recently sent me a letter asking me to ring them on a particular number when I rang them on that number there was a message saying "this number is no longer in use please ring -----" great communication BT.
- Mike Melbourne, Bedford England, 13/11/2008 14:37
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Once again senior management hype to gain a bonus has outweighted the damage to business.
Any bonus tied to objectives must only be given after the objetive has been shown not to damage the business in the long term. Here it was claer that people were being pushed to gain unacheiveable targets and rather than loose a bonus they wer promised and of course not delivered. The bonus is the scourge of all businesses especially at the lower levels of management because it is a short term mentality, ie what can we achieve this year, not what is of benifit to the business and sustainable over the next ten years.
Who suffers, the staff and the shareholders - and where were the unions in all of this, sounds like they were supping at the management table, mind you the management union members wold all be on the bonus system so it is not surprising that 10,000, yes 10,000 workers have to go - not too much of a union apparantly !
- Sellout, London, England, 13/11/2008 13:40
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