With Pay Strikes Ending, BT Merges Divisions To Save £100m In Annual Costs

Just as one source of tension at BT ends, with unionized workers voting to accept the latest pay offer rather than to extend industrial action, the British telco giant is merging Global and Enterprise divisions to save costs.

The former state-owned monopoly confirmed it’s bringing together the B2B units, rebranding them as BT Business. This, the company said, would create a “single interface” for corporate and public sector clients, “leveraging the full scale and capabilities of BT Group.”

The main rationale would seem to be “consolidation and rationalization of management teams, support functions, product portfolios and system, with annualized cost saving on £100 million” identified. Lest we forget, BT has upped its cost saving targets from £2.5 billion to £3 billion ($3 billion to $3.6 billion) “by the end of FY25.”

BT Business is to be led by the wonderfully named Bas Burger, who is currently leading BT Global. Prior to BT he was exec president and a member of the management committee at tech services biz Getronics.

The business he leads will be comprised of three units: supporting UK consumer connectivity; business and public sector; and UK nationwide Openreach fixed access infrastructure.

The merging unit run a portfolio that includes fixed line and IP voice, Unified Comms, Mobile, fixed and networking, security, cloud and IT and managed services, with Enterprise focused on the UK and Global… well the clue is in the name.

BT plans to make EE the flagship brand for consumers.

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Philip Jansen, BT Group CEO, said: “By combining the two units, BT Business will bring the group’s combined assets, products, capabilities and brand to the service of all our 1.2 million business customers who will benefit from faster innovation and delivery.”

Rob Shuter, who runs BT Enterprise, will “step down from executive life and spend time with family and on his personal interests,” the company confirmed.

No doubt working out the details of the integration in the coming months will pique the interest of BT unions, including CWU and Prospect, as role duplication is addressed and some folk are deemed surplus to requirements.

The CWU recently advised the thousands of BT engineers and call center staff in its membership to accept the pay offer BT made. Yesterday it confirmed that 81 percent of votes cast on the same day approved the offer. “Of the ballot papers dispatched, 73 percent were returned.”

The offer is a “£1,500 flat-rate fully consolidated and pensionable pay increase, payable monthly from 1st January 2023.” Some 85 percent of BT Group workers will receive this, though it was 26,000 Openreach engineers and call center staff that participated in industrial action.

This is in addition to the £1,500 pay award BT paid staff from April, which is the source of the conflict with the CWU and led to eight strike days between July and October. The union was holding out for ten percent, citing rising inflation but BT ignored this.

These were the first nationwide strikes at BT since 1987, impacting 40,000 customer connections over the summer. Given the restructuring taking place in another part of the country, it is not unreasonable to expect the unions will get involved again. ®