Business and Capital Market Analysis !!!

BT to Cut 10,000 Jobs; Second-Quarter Profit Falls (Update3)
By Simon Thiel

BT Group Plc, the U.K.'s largest phone company, aims to cut about 6 percent of its workforce in the year through March to improve profitability after reporting a slide in second-quarter earnings.

Most of the 10,000 cuts, out of a workforce of 160,000, will be "indirect labor"' such as agency workers, contractors, subcontractors and offshore employees, the company said in a statement today. Earnings before interest, taxes, depreciation, amortization and costs to cut jobs dropped 1.3 percent to 1.43 billion pounds ($2.1 billion) in the fiscal second quarter.

BT surged the most in six years in London trading. The economic downturn makes it more difficult to win new clients and complete contracts, Chief Financial Officer Hanif Lalani said in a Bloomberg Television interview today. About 4,000 positions of the planned 10,000 have already been slashed, BT said. Job cuts among people working directly for BT will be largely achieved through natural turnover, the company said.

The company aims to cut costs by 700 million pounds to 800 million pounds this fiscal year, Livingston told reporters in a conference call. The current economic slump "will get worse before it gets better,"' the CEO said.

BT also said planned changes to its pension program will help to cut costs by about 100 million pounds a year. The company proposed this week to raise the retirement age to 65 from 60, base payouts on career average pay instead of final salary and build up pension entitlement at a slower rate.