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From The Socialist newspaper, 20 May 2009

BT say they're sorry

BT's chief executive has apologised to shareholders for the 134 million loss suffered by the company in 2008-2009. "It has been a really difficult year" he says. But nowhere near as difficult as the situation for BT's workforce, facing 15,000 job losses. Bernard Roome, a member of the Communication Workers Union national executive, explains what is really happening.

BT's senior management have failed to secure contracts which will provide them with a profit. Over the past three to five years they've gone round the world agreeing contracts with major companies. Now they have found that although they have been creating revenue, the costs of managing these contracts have meant they have ended up with serious losses, particularly in their Global Services division.

What they have decided to do is use the last quarter of this year, using the present economic recession as the reason, to write down most of their losses, so that next year they will be seen to be in a stronger position.

The reality of the situation is that BT have been more interested in managing the City's expectations than they have been in providing services to customers. If BT was in the public sector, their responsibility would be to their customers - to provide reasonable, inexpensive services for them.

BT have been picking up major contracts for large multinational companies on the basis that they were a global telecoms and IT provider. Although they received what seemed to be considerable revenue from these contracts, the actual costs of running the contracts were either initially not taken into account or escalated as the contracts were implemented.

In the end it's not the senior managers who suffer. They go away, most of them with golden handshakes. The workers have had to manage these contracts - and nobody is saying they haven't been managed well - and their reward is their jobs gone.

The agency staff who will lose their jobs may not be BT employees but many of them are CWU members. While BT can say the job cuts are not all from full time employees in the UK, quite a lot of the agency workers have been working for BT for many years, yet despite this BT are showing no loyalty to them whatsoever.

BT have made a commitment to try to avoid compulsory redundancies. But the danger is that there will be a harsher management style to ensure that more people are managed out of the business anyway.

The jobs will go between now and the end of March next year. But they also announced 10,000 job cuts last year and 15,000 people went. So that is 30,000 jobs gone from BT in two years.

This will always be a problem while the company's prime concern is to give the City and its shareholders what they want. It should be a service industry providing communication and IT services, not delivering profits to the City. While the staff have been told there will be a pay freeze this year, BT still intend to pay a dividend to the shareholders.

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In The Socialist 20 May 2009:

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