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BT cuts 15,000 jobs and slashes dividend

BT cuts 15,000 jobs and slashes dividend

BT yesterday said it would axe 15,000 jobs, more than expected, and cut its final dividend by nearly 60 per cent – the first reduction in seven years – after an “unacceptable” performance at Global Services, the UK telecoms group’s troubled IT services division.

The cut means the final dividend is just 6.5p, in line with analysts’ expectations and some 59 per cent lower than in 2007-08.

The move was also an attempt by BT to close the large gap in its pension fund, the largest defined benefit scheme in the UK. BT said its net pension position as of March 31 was a deficit of ¢G2.9bn (¢G4bn gross of tax), compared with a net surplus last year of ¢G2bn ($3bn). It said it would raise its annual pension contributions to ¢G525m from ¢G280m over the next three years, as agreed with the pension fund trustees.


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