London (CNN) � BT Group is planning to slash up to 55,000 jobs in the next five to seven years as it makes greater use of , including artificial intelligence, to cut costs and simplify its business.
The UK telecom company Thursday that its total workforce would fall to between 75,000 and 90,000 by 2028-2030, from 130,000 at present. That includes BT employees and contractors supplied by a third party.
“By continuing to build and connect like fury, digitize the way we work and simplify our structure, by the end of the 2020s BT Group will rely on a much smaller workforce and a significantly reduced cost base,� CEO Philip Jansen said in a statement.
On a call with analysts, Jansen added that 10,000 roles would be replaced by digitization and automation.
“We will be a beneficiary of AI unequivocally,� he said, noting that the technology would help the company deliver customer service “in a more seamless way.�
“Our chatbot Amy deals with lots of customer queries already,� he added. BT was beginning to explore new products and services that might come from “generative AI and large language model AIs.�
Jansen also said that around 10,000 fewer people would be needed to service and repair digital networks, which “go wrong less often� and can be fixed more easily than older networks.
Traditional telcos struggle
Earlier this week, Vodafone , once the world’s biggest mobile telecom group, said it would cut 11,000 jobs, or about 11% of its workforce, over . The company also unveiled a turnaround plan to revive its ailing fortunes under new CEO Margherita Della Valle.
Traditional telecom companies have suffered in the face of competition from the likes of Apple and Google , which offer “the same staple services of voice, messaging, and video calls,� according to McKinsey.
European telecom companies have fared particularly poorly over the past decade, delivering lower returns to shareholders than their US peers, the consultancy said in a .
BT has already cut £2.1 billion ($2.6 billion) in costs since April 2020.
While “drastic,� BT’s planned job cuts were not “overly surprising given the mounting costs and slim margins in the wider business,� Matt Britzman, an equity analyst at broker Hargreaves Lansdown, said in a note.
Once BT’s broadband and 5G networks were built out, “the strategy shifts to monetizing the infrastructure that’s in place and leveraging new technologies to do that,� he added.
BT said revenue fell 1% to £20.7 billion ($25.8 billion) for the year to March, with growth in Openreach, its fibre broadband network, “more than offset� by declines in other businesses. Its adjusted earnings rose 5% to £7.9 billion ($9.8 billion).
Shares in the company tumbled 8% in London, as higher expenditure leading to a drop in free cash flow disappointed investors.
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