Kitz Forum
Announcements => News Articles => Topic started by: Black Sheep on May 10, 2018, 07:29:24 AM
-
13,000 jobs to go over the next 2yrs, mainly at middle and senior management roles.
BT are even looking at moving their London HQ of 34yrs, to a smaller premises.
-
Good god, bad news. What is going on?
Is some of that through natural loss, early retirement and so forth?
-
Early doors yet, Weaver ...... but IMHO I think this is great news. We appear to have more Chiefs than Indians from the bottom looking up, and I think the hope is that it will make cross-group interaction far easier, which again can only be good.
As with any kind of 'staff losses' previously, I assume it will be made up of what you infer plus healthy incentivisation schemes. Again, these are purely my thoughts and nothing set-in-stone.
-
No coincidence that the job losses are announced on same day, and same time, as the company’s final results?
I can’t pretend I usually understand what’s good or bad about results documents, but the concensus does not seem optimistic, share price down nearly 8% so far this morning. Whether that is a reflection on the job cuts, or the results, who knows.
Never sure, when discussing such things, whether I need to confess an interest, as I have a very tiny shareholding myself, passed down from family and dating all the way back to privatisation. Ah well, as long as the price of beer and Indian Takeaways also drops by 8%, it’ll all balance out. ::)
-
BT Cut 13K Jobs, Raise £3.7bn to Boost FTTP Broadband and Mobile
https://www.ispreview.co.uk/index.php/2018/05/bt-cut-13k-jobs-raise-3-7bn-to-boost-fttp-broadband-and-mobile.html (https://www.ispreview.co.uk/index.php/2018/05/bt-cut-13k-jobs-raise-3-7bn-to-boost-fttp-broadband-and-mobile.html)
BT has released their Q1 2018 (calendar) results, which sees them increase FTTP and Mobile infrastructure investment via an annual capex allocation of around £3.7bn (excluding BDUK) and report that 1.56 million UK premises are now covered by their G.fast and FTTP based “ultrafast broadband” (100Mbps+).
Broadly speaking the first quarter of 2018 has been fairly quiet, assuming you can ignore the on-going battle between the operator and regulator / Government to extract a wider roll-out of FTTP “full fibre” broadband. Meanwhile Ofcom decided not to impose a temporary Dark Fibre Access remedy on Openreach, but they did pledge to try again next March, and BT also reached a crucial pensions deal.
Otherwise the embattled operator initially seemed to be having a good quarter after their mobile division (EE) grabbed 40MHz of the 5G friendly 3.4GHz band. Elsewhere they also announced plans to create 1,300 new UK apprenticeship / graduate Jobs (here) and started to hire another 3,500 Openreach engineers.
Unfortunately all of that must now be tempered against today’s decision to axe 13,000 jobs over the next three years (mainly back office and middle management roles), although they will mitigate some of that by hiring around 6,000 new employees to support network deployment and customer service. This is expected to achieve a year 3 cash cost reduction of £1.5 billion with costs to achieve of £800 million and two year payback.
At the same time BT will boost investment in FTTP and their language now sounds like more of a target than an aspiration: “In fixed, Openreach is taking a ‘Fibre First’ approach that positions the business to deliver, economically, at scale and pace, 10 million fibre-to-the-premises, FTTP, by the mid-2020’s, while in mobile, BT will continue to build 4G to 95% geographic coverage by 2020 and intends to lead the market in 5G.”
Financial Highlights – BT’s Quarterly Change
* BT Group quarterly revenue = £5,967m (down from £5,970m)
* BT Group reported profits before tax = £872m (up from £660m)
* BT Group total net debt = £9,627m (up from £8,923m)
* BT Wholesale quarterly operating profit = £126m (up from £110m)
* Openreach quarterly operating profit = £307m (up from £305m)
* Openreach quarterly capital expenditure = £394m (down from £477m)
-
By various online analyses I have read, the results were pretty much in line with city fotecasts, so I don’t see why they should lead to a big drop in share price on the day results are published. The price has already been drifting downwards for a long time now so “results as expected” would already have been factored into the share price.
I’m guessing therefor it is a reaction to the “Strategy update”, that included the job losses among other changes.
https://www.btplc.com/News/#/pressreleases/bt-announces-strategy-update-to-drive-leadership-in-converged-connectivity-and-services-2503873
Share price now hovering around 9% drop today, and well under half of 2015 levels.
If I were a BT employee I’d be worried about my pension; deficit currently £11-14 billion, depending on which report you read. Especially if they try to offer beneficial early retirement, as alternative to redundancy to the 13,000 in the departure lounge, which might further deplete the fund...
-
@7LM I found an article (https://www.jltemployeebenefits.com/what-we-do/defined-benefit-scheme-solutions/for-employers/liability-management/early-retirement) that, unless I am misreading, seems to suggest otherwise. Also there could be redundancy payment, which up to £30K is tax free.
Money Advice Service Up to £30,000 of redundancy pay is tax free. Any non-cash benefits that form part of your redundancy package, such as a company car or computer, will be given a cash value and added to your redundancy pay for tax purposes. This might then take it over the £30,000 limit.
, which would be funded separately as a one off cost, but absorbed through later years by the benefits of staff reductions. If a company had a defined benefit scheme it would most likely older staff on that, whereas newer recruits could well be placed on a less costly defined contribution one.
Found a somewhat sarky piece from the Indie (https://www.independent.co.uk/news/business/comment/bt-13000-job-losses-cost-cutting-gavin-patterson-openreach-a8344561.html) :-X
-
@7LM I found an article (https://www.jltemployeebenefits.com/what-we-do/defined-benefit-scheme-solutions/for-employers/liability-management/early-retirement) that, unless I am misreading, seems to suggest otherwise.
That article seems to be discussing voluntary early retirement.
I am in a defined benefit scheme myself, that offers voluntary early retirement and quite eagerly encourages it. The benefits are reduced by an amount that is supposedly cost neutral. That is to say, when all risks are considered and factored that in the scheme is likely in theory to be no better off and no worse off. In reallity, I suspect the odds are weighted in favour of the funds, hence they win, and it encouraged. In my case, istr you lose 5% for each year of early retirement.
But I believe some schemes have in the past, as alternative to compulsory redundancy and in agreement with the employer, offered early retirement with no reduction in benefits. Clearly that cannot be cost neutral, as the retiree has the benefit of more years’ pension than would normally be the case. So the retiree wins extra cash, which the fund loses, and the fund is one step closer to running dry. I have no idea whether such things still happen. It may even be illegal nowadays, I’d like to think it should be. Just don’t know.
-
If I were a BT employee I’d be worried about my pension; deficit currently £11-14 billion, depending on which report you read. Especially if they try to offer beneficial early retirement, as alternative to redundancy to the 13,000 in the departure lounge, which might further deplete the fund...
There has been an on-going consultation between the CWU, BT Group and 'Wealth at Work' regarding the pension deficit for almost a year now, with a consultative ballot having taken place very recently.
As we speak, it is still very much in the air regarding what is the best way forward for individuals, as they have now ceased the BTPS (DB scheme), and we are all migrating over to the BTRSS scheme, or a hybrid scheme ..... the choice is up to the individual.
There are lots of incentives to retire early, or go part-time .....and they have devised a new 'Pension modeller' that gives you the freedom to 'Bugger about' with figures, AVC's etc, etc ....... coupled with that, there are an abundance of pension seminars and webinars taking place all over the country for emplyees.
So, all-in-all ...... "Worried" isn't the case right now ...... 'Confused' is !!. Friggin' minefield. :)
-
'Confused' is !!. Friggin' minefield. :)
Ha ha, Yes, been there, got tee shirt etc. And as I’m sure will be clear, whatever ‘advice’ is offered depends upon a crystal ball to foresee what may happen to the economy in years to come, or what may become of BT, or how taxation may change, or how long you may live.
In my case, I retired a couple of years early. But if I had retired three more years earlier, I would not only have had the pension for longer, I would actually have got a larger pension as, in the meantime, early retirement factors had become less generous. Trouble is, three years earlier, nobody knew that was going to happen, so nobody advised me to retire. :'(
-
Spot on ^^^.
I have to admit, we are really well looked after at BT regarding our pension and I have a BT-recommended financial/pensions advisor helping me with the ever changing decision making.
But, the buck stops at oneself ... and predicting foreseeable health is the big question when mulling over things. I do however concur with my advisor's advice of retire as soon as is possible, and with as big a lump sum as is possible. :)
-
That article seems to be discussing voluntary early retirement.
I am in a defined benefit scheme myself, that offers voluntary early retirement and quite eagerly encourages it. The benefits are reduced by an amount that is supposedly cost neutral. That is to say, when all risks are considered and factored that in the scheme is likely in theory to be no better off and no worse off. In reallity, I suspect the odds are weighted in favour of the funds, hence they win, and it encouraged. In my case, istr you lose 5% for each year of early retirement.
But I believe some schemes have in the past, as alternative to compulsory redundancy and in agreement with the employer, offered early retirement with no reduction in benefits. Clearly that cannot be cost neutral, as the retiree has the benefit of more years’ pension than would normally be the case. So the retiree wins extra cash, which the fund loses, and the fund is one step closer to running dry. I have no idea whether such things still happen. It may even be illegal nowadays, I’d like to think it should be. Just don’t know.
Schemes I have dealings with would require the employer to immediately fund any extra cost of the fund due to early retirements.
-
Spot on ^^^.
I have to admit, we are really well looked after at BT regarding our pension and I have a BT-recommended financial/pensions advisor helping me with the ever changing decision making.
But, the buck stops at oneself ... and predicting foreseeable health is the big question when mulling over things. I do however concur with my advisor's advice of retire as soon as is possible, and with as big a lump sum as is possible. :)
Yep - get it whilst you can enjoy it. No point sitting on a large lump sum in your incontinence pants.
-
:lol: :lol: :lol:
-
I have to admit, we are really well looked after at BT regarding our pension and I have a BT-recommended financial/pensions advisor helping me with the ever changing decision making.
I am glad to hear that the relationship between Company, Trustees, and scheme members seems amiccable. That is good.
But do not forget, the trustees have legal duties to manage the scheme. Such schemes (in the general case, not BT specific) can, and will, employ dodgy wide-boy lawyers, who will pour over the small legalese print in the deeds, looking for loopholes in vageuly worded terms, to reduce benefits.
I do speak from experience. My own pension was with a well-liked and respected employer, and we all enjoyed a lot of trust between employees, employer, and the scheme. Over the years the Company transformed its structure, becoming more isolated and as the pensions deficit grew, the wide-boy lawyers got drawn in. Loopholes were found and benefits were slashed, without sympathy, wherever it could legally be done. The company didn’t care, because the old DB scheme had been closed and most employees by then were on the newer money purchase plan. It can happen anywhere, and probably will happen everywhere, just a question of when.
As a scheme member I would never, ever, trust advice that came from a scheme trustee. Legally they are probably not allowed to give advice, but they can issue communications that look like and sound like advice, tread carefully.
-
Schemes I have dealings with would require the employer to immediately fund any extra cost of the fund due to early retirements.
Now maybe, but 25-30 years ago, pre Gordon Brown’s pensions raid, when funds were generally in surplus rather than deficit, and regulations were less strict? Pretty sure they could just raid the pension fund in those days, to avoid redundancy costs, as long as it was in surplus.
But even now, if the employer has to make good the cost, how is the cost calculated? Most likely it will depend upon an Actuarial analysis, in other words, a study of probabilities, which may prove wrong, and is very susceptible to either deliberate or unintentional ‘bias’. I am deeply sceptical of such calculations.
-
I am glad to hear that the relationship between Company, Trustees, and scheme members seems amiccable. That is good.
But do not forget, the trustees have legal duties to manage the scheme. Such schemes (in the general case, not BT specific) can, and will, employ dodgy wide-boy lawyers, who will pour over the small legalese print in the deeds, looking for loopholes in vageuly worded terms, to reduce benefits.
I do speak from experience. My own pension was with a well-liked and respected employer, and we all enjoyed a lot of trust between employees, employer, and the scheme. Over the years the Company transformed its structure, becoming more isolated and as the pensions deficit grew, the wide-boy lawyers got drawn in. Loopholes were found and benefits were slashed, without sympathy, wherever it could legally be done. The company didn’t care, because the old DB scheme had been closed and most employees by then were on the newer money purchase plan. It can happen anywhere, and probably will happen everywhere, just a question of when.
As a scheme member I would never, ever, trust advice that came from a scheme trustee. Legally they are probably not allowed to give advice, but they can issue communications that look like and sound like advice, tread carefully.
The days are gone, whereby companies can be 'wide-boys' or carry out 'dodgy-dealings' .... especially where company pensions are concerned !!
The scheme trustees are there to manage the fund, not give advice. I think you may have mis-understood what I intended about BT providing a financial advisor. They don't pay for them, they just rubber-stamp the fact that they are akin to a blue-chip company and can be highly trusted with your investments or giving advice. Unlike what happened to a friend of mine's brother, who after 11yrs with a certain financial advisor, ran off with a few hundred grand of his money !! :no:
BT have had to re-assess their pension fund deficit (which came about as a result of borrowing from the company to purchase 3G licenses, back when regulation was p1ss-poor), and as a result of this and the fact that their pensioners are living longer, the DB scheme has had to close.
I cannot begin to tell you the options that are now available to folk thinking of retiring ..... they are many and varied ..... and as I say, luckily I have a decent employer who have brought in an independent company to guide us through the changes and inform us of the plethora of different options.
:)