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BT cuts jobs and addresses pension problems

 BT cuts jobs and addresses pension problems
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BT says it is going to cut 10,000 jobs – six percent of its world wide workforce. That announcement came as the British telecommunications group posted slightly better than expected quarterly earnings.

The job cuts involve 4,000 people directly employed by BT, plus contractors, consultants and agency staff.

Industry watcher Ian Watt said there were a number of factors affecting BT’s earnings: “On telephony certainly there is some quite strong substitution from mobile, people are making fewer calls over their fixed line, and using mobile. But also the other important point is the slow down in the overall market growth for broadband.”

The company said the job reductions would be achieved predominantly by not replacing employees who leave the company.

One BT worker seemed philosophical: “Everybody has to meet the credit crunch with the manners that they can. Every company has to do what they can to survive.”

BT’s shares jumped almost nine per cent. Last month the stock fell to historic lows after the former state phone monopoly issued a profits warning.

Investors were also cheered by news of possible changes which could cut costs at BT’s expensive pension scheme. They include raising the age of retirement and increasing employee contributions