BT reveals prices will be reviewed under efforts to offset £100m Budget blow
The group joins the likes of Sainsbury’s, Marks & Spencer and Primark owner Associated British Foods in revealing soaring costs from Budget measures.
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Your support makes all the difference.The boss of BT has revealed that the telecoms giant is the latest to face a Budget cost hit, with an extra bill of around £100 million, and could look to hike prices to help offset the impact.
Chief executive Allison Kirkby said the group would go “harder and faster” with cost-cutting efforts to help counter the soaring tax increase due next year from the Government’s decision to raise employers’ National Insurance (NI) contributions.
She confirmed actions would include a review of prices charged to customers, alongside supply chain savings and aims to use artificial intelligence and automation to improve productivity.
It's a new inflationary pressure that we need to suffer in our business. We will be going harder and faster on the cost transformation and plans that we have already laid out.
But she stressed the group would not look to strip out more roles under its cost-cutting programme, which is already set to see it slash up to 55,000 jobs worldwide by 2030.
It sees BT join the likes of Sainsbury’s, which also laid out its Budget tax bill pain on Thursday, as well as Marks & Spencer and Primark owner Associated British Foods, which have all revealed soaring costs from the employer NI changes.
Ms Kirkby said: “It’s a new inflationary pressure that we need to suffer in our business.
“We will be going harder and faster on the cost transformation and plans that we have already laid out,” she added.
She said that as part of the measures, the group would “look at our prices relative to input inflation”.
The revelation came as BT cut its annual sales outlook and revealed another 2,000 jobs have gone under its ongoing plan to slash costs.
It reported a 10% drop in pre-tax profits to £967 million for the six months to September 30 as revenues fell 3% to £10.1 billion amid a “competitive retail environment”.
Shares in the firm fell 6% as it said it now expects annual revenues to fall by 1% to 2%, blaming trading outside the UK and reductions to sales of less profitable kits, while it also flagged a weaker performance in the corporate and public sector.
BT had previously guided for revenues to rise by up to 1% in 2024-25.
But the company kept its underlying earnings guidance unchanged, for around £8.2 billion.
The firm also laid bare the pace of its previously announced jobs cull to slim down from 130,000 when the plan was first outlined in 2023 to between 75,000 and 90,000 workers by 2030 as it looks to shave billions off its cost base.
It said it slashed its workforce by just over another 2,000, or 4% year-on-year, to 118,000 and saved £433 million in annual costs in the first half alone.
Ms Kirkby said the group was also looking at potentially selling off or breaking up its international arm, which the group has been carving out from the rest of the business.
She said the firm had “positive dialogue” with other parties about BT Global.
“We are looking at a range of scenarios to optimise that business,” she said.
She took over the top role in February with aims to turn the business around and double down on cost-cutting efforts and aggressively roll out its full-fibre broadband network across the UK.
In May, the group announced a further £3 billion in cost cuts over the coming years, as Ms Kirkby expanded on plans to turn around the struggling telecoms giant.
She said at the time that the company had hit its initial target of £3 billion in savings a year before schedule, and said it would slash the same sum by 2029.