Telecom giant BT to cut jobs amid AI shift

International telecoms giant BT is to reduce its workforce from 130,000 people to 75,000 over the next 10 years, with staff being replaced by technologies such as artificial intelligence.

Up to 20 percent of the cuts will be in customer services, with most job cuts coming in the United Kingdom, reported the BBC.

Under the leadership of chief executive Philip Jansen, BT, formerly known as British Telecom, is transforming to build a national fiber network, roll out 5G mobile services, digitize processes, adopt AI, and simplify structure.

By the end of the 2020s, the workforce and cost base will have significantly diminished, said Jansen.

"New BT Group will be a leaner business with a brighter future," he said.

Jansen said BT's job cuts would escalate with the completion of its fiber build and the switch to digital networks, reducing the need for 10,000 network engineers.

An additional 10,000 positions will be eliminated as automation is adopted, said Jansen, noting there were "huge opportunities" to use AI, citing generative AI language models as a transformative technology similar to the rise of the smartphone.

He said new technologies could save the company hundreds of millions of pounds compared to its old IT systems.

"Whenever you get new technologies you can get big changes," Jansen said. The deployment of generative AI tools such as ChatGPT, which can write scripts and solve computer code, "gives us confidence we can go even further", he said.

He said: "Yes it has its risks, we've got to be very careful, but I personally think it's going to be as big as the internet and as big as mobile phones. This is a massive change."

The Communication Workers Union, the largest union representing BT staff, said it had anticipated the job cuts, reported the Financial Times newspaper.

"The introduction of new technologies across the company, along with the completion of the fiber infrastructure build replacing the copper network, was always going to result in less labor costs for the company in the coming years," it said.

"We have made it categorically clear to BT that we want to retain as many direct labor jobs as possible and that any reduction should come from subcontractors in the first instance and natural attrition."

The changes were announced soon after BT's rival Vodafone said on Tuesday that it will reduce its global workforce by 11,000, or 10 percent, in an effort to reestablish its competitive advantage.

BT's reductions, which will represent a 40-percent cut of total staff, are an escalation of the company's cost-saving push amid rising inflation, noted The Daily Telegraph.

BT this week also reported a 12-percent drop in profits of 1.7 billion pounds ($2.1 billion) for the year to April, which the company said was largely due to higher costs as it transitions from a copper to fiber network.