BT dials up London HQ relocation as part of job cuts and estate rationalisation

By Paul Norman - Thursday, May 10, 2018 8:32

BT said this morning it would cut 13,000 managerial and back-office jobs and leave its 273,000 sq ft London headquarters at 81 Newgate Street in St Paul’s as part of a further rationalisation of its UK estate.

BT said the job cuts would save £1.5bn in three years and will cost £800m to implement.

The telecoms company said job losses mainly involved back office and middle management roles with around two-thirds focused on its circa 80,000 UK workforce.

BT said it was moving out of its central London headquarters in St Paul’s, its home since 1874, but will stay headquartered in London. The move forms part of plans to cut the number of locations it owns across the UK. The rationalisation will see some new offices opened and will not affect the BT Tower.

BT occupies the 10-storey BT Centre at 81 Newgate Street in St Paul’s. The property was constructed in 1985 and comprises 273,000 sq ft of offices.

The group is hiring about 6,000 new staff, primarily in customer service and engineering.

BT has been pursuing a massive reduction in its giant property portfolio since the former nationalised telecoms giant was opened up to competition. It has traditionally worked with Telereal Trillium on the plans.

In 2001, BT offloaded the majority of its property portfolio, including offices, exchanges and call centres, to Telereal in a sale and leaseback deal for around £2.4bn. BT's UK property services were outsourced to Telereal before it bought Trillium in 2009 in a £750m deal from Land Securities.

In 2009, BT outlined an ambitious five-year target to save £65m a year under its P28 project, which would see it downsizing its vast property portfolio vacating 28 offices over the period. By the end of 2014, BT planned to shed more than 1m sq ft of office space and trim the £850m a year it spent on its UK portfolio.

In 2011, BT reduced is worldwide costs associated with property rationalisation to £88m, down from £121m the previous year, and slimmed the value of its property, plant and equipment to £14.62bn from £14.85bn in 2010.

In 2013 Colliers International won a global pitch to advise BT across its entire global estate outside the UK and Ireland.

At the onset of the tender process, BT, together with its UK estate, was thought to occupy around 100m sq ft across circa 8,000 properties globally.

pnorman@costar.co.uk

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