British telecom company, BT Group, CEO Allison Kirkby said advancements in AI could lead to further job cuts at the firm.

She noted that BT’s plan to cut over 40,000 jobs and save £3 billion (US$4.1 billion) by 2030 might not fully account for AI’s impact.

“Depending on what we learn from AI… there may be an opportunity for BT to be even smaller by the end of the decade,” she said.

In 2023, BT announced plans to reduce its workforce, including contractors, by up to 55,000 positions to streamline operations and cut costs.

Kirkby also mentioned the potential spin-off of Openreach, BT’s network infrastructure business, if its value remained undervalued in the company’s share price.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Telecoms follow decades-long pattern of workforce reduction, with AI as the latest catalyst

BT’s announcement represents the continuation of a historic trend rather than a new phenomenon in the telecommunications industry.

The company has undergone multiple rounds of significant downsizing since the 1990s, cutting 30,000 jobs between 1992-1994 as part of a £1.1 billion severance initiative that reduced its workforce from 240,000 at privatization to 135,000 by 1995 1.

This pattern continued with another 13,000 job cuts (12% of workforce) announced in 2018 as part of a £1.5 billion cost-saving strategy 2, demonstrating that large-scale workforce reductions have been a recurring strategy at BT.

The broader telecom industry shows similar patterns, with major U.S. operators collectively reducing their workforce from 766,300 in 2019 to 624,690 by the end of 2024, a reduction of over 140,000 positions in just five years 3.

While previous cuts were driven by competitive pressures, technological change, and operational efficiency goals, AI is now becoming a significant catalyst for the next wave of workforce transformation.

2️⃣ AI enables deeper cuts than initially projected, creating strategic uncertainty

BT’s evolving workforce reduction targets reveal how rapidly advancing AI capabilities are outpacing even aggressive downsizing projections.

The company initially announced cuts of up to 55,000 jobs by 2030, but CEO Allison Kirkby now suggests these plans “did not reflect the full potential of AI” and that BT could become “even smaller by the end of the decade” 4.