BT has announced a new package of cost-saving measures worth £3 billion after completing major investments in its UK full-fibre broadband network, a move that has supported a rise in dividends.
Group revenue edged up to £20.8 billion, a 1% increase year-on-year, driven by higher broadband prices, robust fibre product sales through Openreach, and growth in the consumer business. Despite the modest rise in top-line revenue, profitability came under pressure: pre-tax profit fell 31% to £1.18 billion, while adjusted EBITDA increased slightly by 2% to £8.1 billion.
Investment in infrastructure and network expansion
Capital expenditure declined by 3% to £4.9 billion as network spend eased. Nevertheless, Openreach’s full-fibre (FTTP) rollout accelerated, connecting around 78,000 homes per week during the latest quarter. So far, roughly 14.8 million FTTP connections have been built, with adoption approaching 34% among homes passed.
The company also reported reaching its prior target of £3 billion in cost savings for 2025 a year ahead of schedule. That milestone has been aided by an ongoing workforce reduction programme that targets a total headcount reduction of 55,000 roles by the end of the decade.
Allison Kirkby, who became chief executive earlier this year, said BT is at a strategic “inflection point.” Under her leadership, the company plans a further £3 billion of cost reductions by 2029. The announcement comes amid a sharp decline in BT’s share price, which has fallen from 208p in May 2019 to about 105p this year.
New financial goals and workforce strategy
Surpassing its initial savings target early has enabled BT to set a fresh ambition: deliver £3 billion of gross annualised cost savings by 2029. The programme will involve rigorous workforce restructuring, reducing employee numbers from around 130,000 today to a range of 75,000–90,000 by 2030. The company expects to use automation and artificial intelligence to replace roughly 10,000 roles.
Kirkby projects that these measures will materially increase short-term cash flow and could more than double normalised free cash flow over the next five years.
“As we move into the next phase of BT Group’s transformation, we are sharpening our focus to be better for our customers and the country,” Kirkby said. “We are accelerating the modernisation of our operations and evaluating options to optimise our global business. This will create a simpler BT Group, fully focused on connecting the UK, and well positioned to generate significant growth for all our stakeholders.”
Following the announcements, BT’s share price rose about 8% in early trading to just over 122p. The company also increased its shareholder dividend by 3.9% to 8p per share.
Financial challenges and investor scepticism
Despite operational progress, BT faces the dual challenge of rapidly expanding its FTTP network while continuing to reduce costs to manage its substantial debt load. The financial pressures have prompted heavy short interest: investors placed approximately £300 million of short positions in BT shares this week, the largest short since 2014, reflecting concern over the company’s ability to stop its share-price slide.
Major institutional investors, including BlackRock and the Canada Pension Plan Investment Board, together with hedge funds such as AKO Capital and Kintbury Capital, have assembled short positions amounting to around 2.79% of BT’s stock, making it one of the most heavily shorted names in the FTSE 100.
Kirkby responded confidently to the scepticism, saying, “I always love to squeeze the shorts… and prove them wrong,” underlining her determination to deliver on the turnaround plan.
Events and industry context
UK broadband and telecom investment is unfolding alongside a dynamic events calendar. Unified Communications is a two-day event held in California, London, and Amsterdam that explores the future of workplace collaboration in a digital world. The conference runs alongside related gatherings focused on digital transformation, IoT, edge computing, intelligent automation, AI and big data, and cybersecurity and cloud.
TechForge and other industry platforms continue to list upcoming enterprise technology events and webinars relevant to professionals tracking developments in telecoms, networking and digital transformation.