BT to shut 90% of its real estate

BT has announced it is to shut down 270 UK offices as part of a three- to five-year cost cutting exercise that looks to save the tech giant £1.5 billion. This equates to almost 90% of BT’s current real estate portfolio.

After the dust settles BT will retain just 30 sites, containing, the company said ‘modern, future-fit buildings, including corporate offices, contact centres and specialist sites.’

According to BT eight of those locations earmarked for a bright new future includes Belfast, Birmingham, Bristol, Cardiff, Edinburgh, Ipswich, London and Manchester.

However, one site that will not be saved is the company’s historic St Paul’s headquarters in London. A building it has operated out of since 1874. It has been reported BT will make £200 million selling it off.

We have dedicated teams working on identifying the best buildings to move into and which ones to design for the future. As a result of this programme, BT people will be housed in inspiring offices that are better for our business and better for our customers.

- Phillip Jansen: CEO, BT

The restructuring programme was begun by Phillip Jansen’s predecessor, Gavin Patterson. Who, during his controversial tenancy, oversaw an accounting scandal in Italy, inconsistent financial returns and the axing of the company’s final pension salary scheme.

In addition to the sell-off of properties, BT plans to lay-off 13,000 employees over the restructuring period. All told BT employs 83,000 in the UK and 23,000 people overseas. Two-thirds of the job cuts will take place in Britain.

For the fiscal year ending 31 March 2019, BT reported a one percent drop in sales but a six percent increase in profit to £2.159 billion. This was partly due to the company writing-off £875 million in expenses during the year. BT also took a restructuring charge in the year of £386 million, primarily, they said, due to ‘leaver costs.’

Image: Philipp Birmes