News

BT division merger could cause further friction

BT new HQ May 2022.jpg

BT is looking to merge two of its struggling divisions as it looks to cut costs, but this could fuel tensions among workers as job cuts loom.

A source from the Guardian says that the company will look to combine its Global Service division, which offers security and cloud computing services with its Enterprise unit which serves business and government customers in the UK.

Recent growth in BT’s consumer business could not compensate for the decline and a merger could take around £10 million to £20 million of costs out of the business, although a final deal hasn’t been agreed as of yet.

The decision comes after chief executive Philip Jansen raised the firm’s cost-saving target by £500 million to £3 billion.

A BT spokesman told The Telegraph: "We know that there is some overlap of activities between our Global and Enterprise units, and we are working on ways to eradicate this."

Paolo Pescatore, TMT analyst at PP Foresight added: “This comes at no surprise as a much needed change to turnaround the fortunes of its struggling business units.

“There is no silver bullet and arguably this move may still not solve all of its issues.

“One thing is to cut costs but arguably greater focus should be placed on increasing revenue.”

There will reportedly be job cuts after the completion of the merger and this could create further friction amid a long-running battle with unions.

The union representing BT workers just reached an agreement with the company to permanently increase pay.

Workers included those taking 999 calls, engineers and call centre workers began strikes in the summer and were looking for a pay increase citing the cost-of-living crisis.

Under the agreement, workers will receive pay increases of around 6% to 16% depending on their pay grade.