BT CEO Allison Kirkby warned that advances in artificial intelligence could accelerate job cuts already planned at the UK telecoms group. She confirmed BT’s strategy to eliminate over 40,000 roles and cut £3 billion in costs by 2030, but stressed that AI tools might allow deeper reductions. Kirkby noted that if AI enables BT to operate more efficiently, the company may need to become “even smaller by the end of the decade.” She highlighted that the current plan doesn’t fully reflect AI’s potential, suggesting further adjustments could be required to maintain competitiveness.
Strategic Refocus and Openreach Spin-off Prospect
Since becoming CEO in February 2024, Kirkby has doubled down on her predecessor’s restructuring plan, targeting up to 55,000 job cuts by 2030. She has also refocused BT’s operations on its core UK market, divesting Italian and Irish divisions and spinning off the international business into a separate unit. Despite this, BT’s share price remains below the estimated £30 billion value of Openreach, compared with the company’s £18.5 billion market cap.
Investors, including Sunil Mittal, who holds 24.5 percent, support these moves. Kirkby said she prefers to see Openreach’s value reflected in BT’s shares rather than spinning it off but acknowledged that if the abundance of value isn’t reflected post full-fiber rollout, separation might be necessary. Openreach aims to complete its full-fiber build by 2026, covering 25 million homes, then slow to 1 million homes annually toward a 2030 target of 30 million.
This reorientation aims to boost BT’s retail brands, EE and Plusnet, and capitalize on competition disruption following the Vodafone-Three merger. Moving brands to alternative fiber networks in uneconomical areas may also be considered. The strategy seeks to exploit immediate opportunities and protect market share while setting the stage for longer-term structural and technological transformation.
Building Value and Developing Resilience
Kirkby highlighted the importance of ensuring Openreach’s infrastructure investments translate into shareholder value. She pointed out that once the full-fiber network reaches 25 million homes, BT’s capital expenditure will normalize and free cash flow could rebound. This, she argued, would create an ideal moment, post-network build, to consider Openreach’s spin-off or other strategic options. However, her first preference remains increasing BT’s market valuation to reflect Openreach’s true worth within a unified company structure.
In tandem, she emphasized BT’s readiness to capitalize on UK telecom market shifts triggered by the Vodafone-Three merger. By emphasizing EE and Plusnet, BT aims to reinforce its retail market position, offering differentiated products and customer experiences. Kirkby also flagged the possibility of deploying these brands over alternative networks, especially in regions where full-fiber rollout is less commercially viable.
These strategies are part of a broader resilience drive as the Labour government and Chancellor Rachel Reeves brace for economic challenges, including potential tax increases. Kirkby noted that higher employer national insurance contributions, costing BT over £100 million, would be unwelcome. Despite this, she praised the government’s proactive engagement with business and urged patience, citing the time needed to weather economic shocks. BT’s renewed structure positions it to withstand disruption while preparing for future tech-driven efficiencies.
AI, Spin-Offs, and Future Efficiency
Kirkby concluded by reiterating that AI will be a key driver in shaping BT’s future size and structure. She reaffirmed that the strategic review of Openreach will take place once the full-fiber rollout is complete and cash flow stabilizes, with the option to spin it off if value remains unrecognized. Meanwhile, BT plans to leverage AI-enabled efficiencies while exploring new market opportunities in retail and alternative networks. Her remarks underline a dual focus: using AI tools to streamline operations and delivering shareholder value through thoughtful organizational design.
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