TELECOMS giant BT today said costs were down by more than £900 million after a jobs cull in the first six months of its financial year.
The group is in the process of cutting 15,000 jobs in the period to March 31 after trading difficulties at its global IT services division.
The operational problems left BT more than £100 million in the red last year, but chief executive Ian Livingston said there were some encouraging signs as he improved his guidance for group revenues this year.
Underlying earnings of £1.44 billion for the three months to September 30 were also up 2%, ahead of City expectations for a figure of £1.37 billion.
With total cost reductions of £932 million in the first half, BT reported significant headway towards its target for savings of more than £1 billion in the full year. It has revised this guidance to at least £1.5 billion.
Direct staff costs decreased by 12% to £1.18 billion in the second quarter due to job cuts and lower pension charges. As part of the group-wide jobs cull, BT said headcount in its global services arm was 7,600 lower than a year ago.
The company, which has also achieved savings in procurement, said it now expected revenues to be down by between 3% and 4% this year, rather than the 4% to 5% previously forecast.
Mr Livingston added: "We have had another quarter of progress but there remains a lot more to do."
BT’s retail arm saw second quarter revenues decline by 5% to £2.06 billion but a reduction in operating costs meant profits rose 9% to £356 million.
The company added: "We continue to experience challenging market conditions arising from a combination of the current economic climate, particularly in the business market, and competitive pressure."