BT eyes unit merger in bid to cut costs
BT is gearing up to to merge two of its struggling divisions as the telecom giant continues its big squeeze.
As first reported by The Telegraph, the FTSE 100 firm is set to combine its Global Services division, which provides security and cloud computing services, with its Enterprise unit, which serves business and government customers in the UK.
It comes after chief executive Philip Jansen upped the company’s cost savings target by £500m to £3bn, paving the way for job cuts and simplification of the business.
Although the former telecoms monopoly said it was more than half way to achieving this goal, it said further savings would need to be made by “simplifying our product portfolio and our internal processes and systems,” as well as “simplifying our organisational structure to remove any duplication of work”.
The firm saw energy bills climb £200m this year, and ongoing pressure from strike action across BT and Openreach cutting into margins.
The enterprise division shrunk five per cent in the first half of the year, whilst revenues from global services dropped two per cent.
A BT spokesman said: “We know that there is some overlap of activities between our Global and Enterprise units, and we are working on ways to eradicate this.”