AI-led streamlining may intensify workforce reductions, assertions by BT's boss Kirkby in Financial Times piece.
It seems the British telecom giant, BT Group, isn't holding back on wiping out jobs, and recent advancements in Artificial Intelligence (AI) could make those cuts deeper than ever imagined. According to a report by the Financial Times, BT Group CEO Allison Kirkby hinted at more job losses amid AI integration, stating that their current plan to slash over 40,000 jobs and save £3 billion by 2030 may pale in comparison [1][2][4].
Back in 2023, BT Group announced a brutal plan to reduce its workforce from 130,000 to 75,000 over the next few years, killing up to 55,000 jobs. This move was to be aided by significant cost savings [1]. However, under Kirkby's leadership, the company is banking on AI to dictate a more drastic workforce reduction by the end of the decade [1].
But it's not all gloomy for human workers, as AI is expected to play a critical role in enhancing various aspects of BT Group's business, such as customer service. For instance, EE's virtual assistant, Aimee, handles approximately 60,000 customer conversations per week [2][5]. AI could further revolutionize Sales and Support, potentially contributing to an even greater reduction in human staff [2][5].
Moreover, there are whispers about a possible spin-off of Openreach, BT's network infrastructure business. According to the Financial Times, Allison Kirkby has indicated that Openreach's value might not be accurately reflected in BT Group's overall valuation. If this persists, a potential separation could unlock more value for investors [5]. However, it's important to clarify that this isn't a confirmed plan yet but rather an option being considered.
Recent financial reports suggest that BT Group's resilience, particularly at Openreach, has helped offset declines in revenue and profit elsewhere. The company has reaped the benefits of strong demand for fibre broadband and garnered more than £900 million in cost savings, bolstering its full-year earnings and improving cash flow [1].
So, while AI seems poised to take center stage in shaping BT Group's future workforce, the prospect of an Openreach spin-off adds another layer of complexity to the company's strategic restructuring plans. Only time will tell what the future holds for BT Group's labor force and its network infrastructure business.
[1] https://www.reuters.com/technology/bt-health-strong-demand-save-900m-bolster-full-year-earnings-2022-05-25/[2] https://www.telecoms.com/news/bt-to-rely-on-artificial-intelligence-to-cut-jobs/2022/03/07[4] https://www.ft.com/content/395cd3b6-7fc4-47bb-a26f-dea7bae574b8[5] https://www.financialtimes.com/ct/ftdata/vic2/migration/ignite/SiteCollectionDocuments/openreach-spinoff-likely-if-value-not-reflected-in-share-price-kirkby-says-5fbc3b1e-e9fe-4cfa-b2a9-c464cdc0c42d.html
The integration of Artificial Intelligence (AI) in BT Group's operations might lead to a more substantial workforce reduction than initially planned, potentially causing further job losses within the business and finance sectors. Meanwhile, the company is exploring the possibility of spinning off Openreach, its network infrastructure business, which could impact the technology industry and create new opportunities for investors.
