the telephone sector cuts its workforce and turns to digital

A total of 55,000 jobs will be cut over the next seven years. This represents just over 40% of the total 130,000 people employed by British Telecom worldwide, either directly or through intermediaries such as contractors. The operator had already started to cut its costs with the Covid crisis, and management intends to continue and accelerate its plan implemented in April 2020. The objective is to reduce operating costs by three billion pounds. sterling, the equivalent of three and a half billion euros.

On Tuesday May 16, the other British operator, Vodafone, announced an identical plan. 11,000 job cuts over three years, i.e. 10% of its workforce, to boost its competitiveness in a context of financial performance and stock market prices at half mast.

Artificial intelligence is gaining ground

On the side of British Telecom, the results are not good. Its turnover is down but above all, its pre-tax profits are down 12%, to some two billion euros. Same for Vodafone. Business in Africa is doing well but declining in Europe. Both telephone companies suffered from inflationary pressures, particularly from energy prices.

Technological progress is the main reason for these layoffs. More than other multinationals, telephone operators are at the heart of the digital transition. Digitization of services, artificial intelligence… changes that will require fewer workers in the coming decades, and a reorientation towards other professions. This requires profound changes in the production tool and especially in management, right now.

The American computer giants are encountering the same problem and are also embarking on massive social plans. Microsoft plans to lay off 10,000 people, IBM nearly 4,000… and the list is likely to grow.