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British Telecom looking to reduce staffing costs

Despite the fact that British Telecom has already reduced its staffing numbers the company has today announced plans to offer up to a 1 year holiday in exchange for staff taking a 75% pay cut. The move is highly controversial and will see those accepting the deal being paid a fraction of their annual wage in order to take up to a year off as the company struggles with the recession.

With more than 100,000 staff worldwide the company is also offered payment of £1000 for those looking to go part-time after posting losses of £1.3 billion in the first quarter of 2009. While it is highly unlikely British Telecom will "go under" the offer is being made to staff is very surprising and unexpected. It is well-known that the company has significant debts but also has significant cash flow from existing operations and is still one of the strongest telecom and technology providers in the UK.

We should know fairly soon how many of BT's 100,000 staff have agreed to take up one of the offers available and how this will ultimately impact on BT's cost base. These are worrying times for the UK economy as companies historically seen as "untouchable" show they're vulnerable side.

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