Will BT cuts 15,000 more jobs in 2009?

Britain's BT Group cut its dividend and said a further 15,000 jobs would go after a 1.58 billion pound ($2.4 billion) write down and restructuring at its Global Services unit drove it to a fourth quarter loss.

The group, which had for years looked for growth at its Global Services unit which supplies the IT needs of multinational companies, also said it would almost double its pension contributions to 525 million pounds ($794.1 million) a year.

BT, which has twice previously in the past year warned about profits at the Global Services unit, said earnings before interest, tax, depreciation and amortisation and contract and financial review charges were 1.35 billion pounds, down 14 percent.

Profit before tax on an adjusted basis was down 40 percent and on a reported basis showed a 1.28 billion pound loss.

To help meet its increased pension obligations, BT cut its final dividend to 1.1 pence to give a full year dividend of 6.5 pence, which was down 59 percent on last year.

The pension contributions will almost double from the previous 280 million pound annual payment to 525 million pounds a year for the next three financial years.

BT has been engaged in a three-yearly pension review to establish the size of its deficit and what it should contribute to the scheme on an annual basis, based on its asset values and liabilities.

The last review in 2006 put BT's deficit at 3.4 billion pounds and set annual contributions on a 10-year recovery plan at 280 million pounds.

BT said on Thursday the contributions would rise to 525 million pounds but did not reveal the new deficit from the three-year review.

A leading pensions expert said on Wednesday that BT's pension deficit now stood at 11 billion pounds

BT said its triennial pension funding valuation was at an advanced state of completion. It did give its pension position at March 31 on an IAS 19 accounting basis as a deficit of 2.9 billion pounds net of tax, compared with a surplus of 2 billion pounds last year.

"Three out of four of BT's lines of business have performed well in spite of fierce competition and the global economic downturn," Chief Executive Ian Livingston said.

"However this achievement has been overshadowed by the unacceptable performance of BT Global Services and the resulting charges we have taken."

Agencies