BT Managers' Union Mulls Options After 'derisory Or Non-existent Pay Rise

BT is facing a revolt over pay from its line managers, with unions complaining today about the telco giant dishing out increased dividends to shareholders from its fiscal 2025 earnings.

The UK's former state-owned telecoms monopoly is claimed to have made a miserly pay offer to managers in a letter sent to The Register by the Prospect trade union, which represents engineers, scientists and other specialists.

"BT's decision to increase its dividend at the same time as giving a derisory or non-existent pay rise to managers shows the disregard they have for Prospect members," Deputy General Secretary Rachel Curley wrote.

The union says BT's offer was just 1.28 percent for nearly two-thirds of the managers, less than half the rate of inflation, while roughly a third are to be denied a pay rise at all.

Prospect members working for BT voted overwhelmingly to reject the offer, and the union informed the company it is now in a formal trade dispute with them.

"If an acceptable offer does not materialise in the coming weeks, we will be looking at all options available to us," Curley said.

However, line managers may find little sympathy from some other BT staff, who feel they toed the company line when the leadership started to lay off thousands of workers in a bid to cut costs over the past several years.

"They did what the company told them to do: harassed engineers during the strikes we took part in for better pay and to protect our jobs," one BT engineer told us.

"So I am not bothered one bit. If they want to make a stand as a union, then get on with it. I doubt they have the guts to take any action. They will stab each other in the back to get their rewards and bonuses."

BT engineers downed tools in July 2021, the first national strike action since 1987, after the organization offered a pay award of £1,500 to staff without consulting the CWU, a communications union. The action was settled months later in December.

In response to the latest dispute, a BT spokesperson told us:

"The pay proposal presented to Prospect allocated the budget we had available in the fairest way possible, awarding a 3 percent increase to managers whose pay is least competitive compared to the market range for their role, with lower awards for those who are more competitively paid versus the market. We use independent third-party pay data to ensure our market ranges are up to date, and review this on an annual basis."

According to the another BT Group union, CWU, its members - the wider workforce - voted in favor of a one per cent pay rise plus a £1,000 lump sum (both consolidated and pensionable). This happened in March and the increases began on April 1, 2025.

For its full-year earnings to the end of March 2025, BT Group said its dividend was up 2 percent to 8.16 pence per share (pps). With about 9.8 billion shares understood to be outstanding, this equates to a total payout of nearly £800 million ($1.073 billion), by our calculations.

Reported revenue came in at £20.4 billion ($27.3 billion), down 2 percent year-on-year, which the group blamed on weaker international sales and lower demand for handsets. Of BT's divisions, only the Openreach infrastructure arm showed growth in revenue, and even that was only by 1 percent.

However, BT did manage to increase its profits after tax to £1.054 billion ($1.4 billion) from the £855 million ($1.15 billion) for the previous year.

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"FY25 is largely in line for BT, with Global and mobile handsets continuing to weigh on the top line, though cost transformation is improving profitability and cash generation," said Megabuyte Research Analyst Tom Oughton.

"The company has made strong progress with its transformation, saving >£900 million ($1.2 billion) in costs and disposing of several non-core assets. Openreach has continued to dominate the show, with it recording strong EBITDA and revenue growth, with Business and Consumer both experiencing top line declines," he added.

EBITDA, or earnings before interest, taxes, depreciation, and amortization, is regarded as a rough measure of profitability minus a bunch of costs.

For its fiscal 2026 outlook, BT is forecasting revenue to be basically flat, at about £20 billion (c $27 billion) again.

"Looking ahead, BT Group is not anticipating material changes in either its top or bottom line fortunes for the current financial year," said Duncan Aitchison of analyst biz TechMarketView.

"Mid-term guidance from the company, however, projects sustained group and UK services revenue growth from FY27 accompanied by EBITDA increases ahead of turnover supported by enhanced by cost transformation," he added. ®