If you're looking for the reasons behind BT slashing its workforce by 13,000 jobs, start with company culture and vision.
During a full-year earnings report on Thursday, BT Group announced it was cutting 13,000 back-office and middle-management jobs over the next three years as it attempts to transform itself into a leaner, more efficient telco.
While the 13,000 job cuts made headlines, the actual number of job reductions will be closer to 7,000, since BT plans on hiring 6,000 employees to enable new network initiatives and handle customer service duties.
BT has been beset with an accounting scandal in its global services division in Italy while also lowering its financial estimates. Putting all of those issues aside, TM Forum Chief Analyst Mark Newman points to two problem areas for BT that led to the layoffs.
"The BT layoffs illustrate two major challenges facing the telecoms industry: culture and vision," Newman said in a statement that was provided to FierceTelecom. "Our ongoing industry research shows that many large telecom companies are struggling with digital transformation, because of a hierarchical, slow and risk averse organizational structure. New technology, including 5G and software-defined networks are opening up huge new opportunities, and we are working with our members to help them make a strategic shift in how they do business.
"But far too often, organizations are stuck in 20th-Century ways of working, and lack the vision and leadership required to change their business DNA, to become more customer-centric and focussed on opening up new digital ecosystems, including IoT, smart-manufacturing, digital-health and smart-cities. This is starting to happen, but progress is too slow.”
Following the earnings call, there has been speculation that BT Group CEO Gavin Patterson could be headed towards an exit door of his own, which could certainly lead to a change in the company's overall vision and management style.
Changing a company's culture is more complex. BT is the U.K.'s largest fixed network and biggest mobile operator with a history that dates back to 1846. In terms of telecommunications companies, that history makes BT a dinosaur among the more evolved, nimble technology start-ups that it competes with these days.
“It is critical that BT transforms its operating model to build a lean and agile organisation that delivers sustained improvement in customer experience and productivity,” BT said in its earnings report.
Operators are now faced with increased competition for skilled employees from other verticals such as healthcare, financial and enterprise companies for qualified employees.
Finding the next wave of employees from colleges and universities, or other technological sectors, will bring fresh blood into BT's workforce. But cultural change needs to come from the top down to be truly transformational. — Mike