BT Group has become the latest big company to announce significant layoffs after the firm revealed its plans to cut between 40,000 and 55,000 jobs - including contractors - by the end of the decade.
The telecoms giant currently has around 130,000 employees worldwide, with about 80,000 staff in the UK. Approximately 30,000 of those employees are contractors employed through third parties.
Going forward, BT's chief executive Philip Jansen said the company plans to rely on a "much smaller workforce" and digitalise its processes, without around 10,000 jobs in customer services being replaced by technologies including AI tools.
By the end of the 2020s, the company could have a workforce as small as 75,000 to 90,000 people.
"New BT Group will be a leaner business with a brighter future," said Jansen. "By continuing to build and connect like fury, digitise the way we work and simplify our structure, by the end of the 2020s BT Group will rely on a much smaller workforce and a significantly reduced cost base."
Over the past few years, the company has been working through a transformation plan to build a national fibre network, as well as rolling out high-speed 5G mobile services. Now that the network is mostly complete, Jansen said fewer employees will be needed to keep services running.
"When we stop building the network, we won't need that workforce," he said. "We will rely on a much smaller workforce and new networks are much more efficient. There will be fewer contractors, natural attrition and reskilling."
Moreover, the executive praised new technologies including generative AI such as ChatGPT, which he said gives BT "confidence we can go even further" and makes services "faster, better and more seamless".
"Whenever you get new technologies you can get big changes," Jansen added, stressing that the implementation of AI tools would not result in customers feeling "like they are dealing with robots".
He added that the firm would be working with its union partners throughout the job cuts and would also rely on natural attrition – i.e. when an employee leaves the company but is not replaced.
The Communication Workers Union (CWU), which represents the majority of BT workers, said the job cuts were "no surprise".
"The introduction of new technologies across the company, along with the completion of the fibre infrastructure build replacing the copper network, was always going to result in less labour costs for the company in the coming years," a CWU spokesperson said.
The union stressed that BT should aim to keep as many of its core employees as possible, with job cuts coming from sub-contractors "in the first instance" and through roles not being replaced as people leave the business.
BT reported a 12 per cent drop in pre-tax profits to £1.7bn for the year to the end of March this year, but it has said it aims to make £3bn in annualised cost savings by 2025.
The company's announcement follows similar news this week from telecoms rival Vodafone, where new boss Margherita Della Valle said that it plans to slash 11,000 jobs across the group over the next three years in order to address its poor performance.
Over the past few months, a growing list of tech firms have collectively shed over 100,000 jobs as companies react to unexpected financial challenges and contractions in the global economy in the post-pandemic world, as the cost-of-living crisis bites.
A recent report by Goldman Sachs also found that as many as 300 million full-time jobs around the world could be partially or wholly replaced by AI technologies.
