BRITISH TELECOM SEES PROFITS PLUMMET AND SHEDS 3,000 JOBS.

• Position: Company Financial Information

The sharp decline in profits and the 3,000 job cuts announced by British Telecom (BT) on February 2 illustrate the difficulties facing traditional telecommunications monoliths in the age of mobile communications and the Internet. Presenting its profits for the first three quarters, BT warned that nothing is likely to change before the end of the financial year in March. Over the nine months to December, pre-tax profits were down 33.1% to 2.313 billion pounds (Euro 3.8 billion). Turnover rose 19.3% to 15.9 billion pounds. BT, which has a workforce of almost 125,000, also announced that 3000 managerial posts are to go in Great Britain over the next six to nine months, 10% of staff in this category. This measure, which might be followed by further staff reductions, will run to 350 million pounds but will cut costs, particularly on traditional fixed lines, yielding an anticipated annual saving of GBP140 million over the next two years. BT Chairman Sir Iain Vallance indicated that the group faces ever increasing competition while globalisation is continuing in the industry. The price of calls is falling (-25% in April for fixed to...