BT's New CEO Aims to Revitalize Company Amid Investor Backing Bet

BT's New CEO Aims to Revitalize Company Amid Investor Backing Bet

Liliana Rossi
2 min read

BT's New CEO, Allison Kirkby, Unveils Ambitious Turnaround Plan

British Telecom (BT) is set for a major transformation under the leadership of its new CEO, Allison Kirkby. This comes after the company faced heavy bets against its success, with investors wagering a record £300 million against it. Kirkby's plans include a cost-cutting initiative of £3 billion, an increase in dividends, and a strategic focus on the UK market. The company aims to drastically improve its cash flow to £3 billion by the end of the decade while maintaining adjusted revenue growth of 0-1% in the current year. However, BT also cautioned about potentially losing ground in the broadband market to competitors, as it reported a 31% fall in pre-tax profits to £1.2 billion due to a goodwill impairment charge on its business division. Additionally, the company has extended the shutdown of its public switched telephone network to January 2027 in response to initiatives aimed at safeguarding vulnerable customers.

Key Takeaways

  • Allison Kirkby, BT's new CEO, announces a new £3 billion cost-saving plan, an increase in dividends, and a strategic focus on the UK market.
  • BT's cost-saving efforts aim to shut down legacy networks, simplify products, and leverage digital and AI platforms.
  • BT reports reaching its initial £3 billion cost-saving target ahead of schedule and plans to cut an additional £3 billion by 2029.
  • Following the announcement, BT's shares surge over 13%, reaching 127.9p in morning trading.
  • The company expects to elevate normalized free cash flow to £3 billion by the end of the decade.


Allison Kirkby's ambitious cost-cutting initiatives and market-centric approach are aimed at steering BT toward a positive trajectory in the face of the substantial bets against the company. The £3 billion savings, amplified dividends, and digital transformation present promising prospects for enhancing profitability and competitiveness. However, the possibility of broadband losses to competitors, alongside a significant 31% drop in pre-tax profits, highlight formidable challenges. The delay in the public switched telephone network shutdown and industry-led initiatives underscore the regulatory pressures and social responsibilities that BT must navigate. A successful turnaround could yield significant benefits for BT's investors, workforce, and the UK's digital economy. Conversely, further setbacks could impact pension schemes, suppliers, and the broader telecom sector, potentially influencing similar initiatives in the global tech industry.

Did You Know?

  • Cost-Saving Plan of £3 Billion: BT's cost-saving plan is a strategic endeavor aimed at curtailing expenses and enhancing financial performance. It encompasses initiatives such as decommissioning legacy networks, streamlining products, and harnessing digital and AI capabilities, thereby optimizing operations and bolstering efficiency.
  • Goodwill Impairment Charge on Business Division: The goodwill impairment charge represents an accounting adjustment due to the diminished value of an acquired company or business division falling below its acquisition cost. BT's experience of a 31% plunge in pre-tax profits to £1.2 billion reflects this impairment, indicating adverse effects on the business division's value stemming from market conditions, competition, or poor performance.
  • Normalized Free Cash Flow to £3 Billion by the End of the Decade: This strategic objective reflects BT's aspiration to elevate its normalized free cash flow, indicating a significant surplus for deployment in reducing debt, undertaking growth ventures, or returning value to shareholders through dividends and share buybacks.

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