US Edition Ian Livingston, the chief executive, said the company had been dragged down by the “unacceptable” performance of its Global Service division, which provides IT infrastructure to multinational companies and Government departments.
Billions of pounds of writedowns at the division has left BT with a pre-tax loss of £134m for the 12 months to March 31 compared with a £2bn profit last year.
The division's woes have spurred Mr Livingston into radical cost-cutting measures. The company told shareholders today that it cut 15,000 jobs last year and plans to eliminate another 15,000 this year
Mr Livingston said: “Three out of four of BT's lines of business have performed well in spite of fierce competition and the global economic downturn. However this achievement has been overshadowed by the unacceptable performance of BT Global Services."
The Communication Workers Union slammed the mis-management of the Global Services Division for causing the cuts but hoped that the company could now put the episode behind it.
The former phone monopoly also warned that revenues in the current financial year will fall up to 5pc because of the global recession, driving the share price down as much as 5pc.
BT's final dividend was also dramatically reduced to 1.1p, down from 10.4p last year, in an attempt to save cash. The group’s pension fund deficit increased to £4bn, compared to £2.8bn last year. BT has agreed with trustees to increase its annual contributions to £525m.