BT to axe 10,000 jobs

13 Nov 2008

BT has announced that it will cut 10,000 jobs across the whole company, including its BT Global Services division, which is responsible for three key English NHS IT contracts.

The job cuts, amounting to 6% of the total workforce, will be spread across the BT Group. Six thousand will be “agency staff, sub-contractors and offshore roles," a spokesperson told E-Health Insider.

The spokesperson added that the cuts “were not a knee-jerk reaction to the performance of the Global Services group.”

In a statement provided to EHI, BT said: "We do not comment on individual contracts but, as we have said on many occasions, we believe our NHS contracts represent good business for BT."

Despite achieving year-on-year sales growth of 15% and quarterly revenues of £2,157m, the IT services division of BT has not delivered promised cost savings or the performance promised to the City.

BT Global Services has three key NHS IT contracts, totalling almost £3 billion. The company is the single biggest provider of IT services under the £12.7 billion National Programme for IT in the NHS.

As well as being the local service provider responsible for upgrading NHS systems in London, it is responsible for the N3 network and national data Spine.

Although performance on the last two contracts has been a success, the London LSP contract has proved far more difficult, with implementations of key hospital systems now on hold and under review.

In total, BT Group’s revenues for the second quarter (to the end of September) were up 4% to £5,303m. But the the company said it failed to deliver planned cost efficiency programmes and achieved “no material productivity improvements on major contracts.”

Ian Livingston, BT’s chief executive, said of second quarter’s results: “Demand for our BT Global Services proposition remains strong, revenue grew strongly in the quarter and the pipeline is healthy. What we have to do now is translate revenue growth into better profitability.”

Jon Hoeksma

Reader's Comments

The Credit Crunch

17 Nov 08 17:01

One thing the credit crunch is showing us is that it is a good idea to spread your portfolio of business critical systems across several different suppliers. The vision of the all mighty, unsinkable business monolith surely has taken something of a knock (General Motors anyone)? This introduces an entirely new risk into the country wide adoption of one system by the NHS. Of course NPfIT will take the usual stance, the risk will be ignored. Not to worry, its only our money they are wasting.