Some 43 years have passed since BT was hived off from the Royal Mail ready for a more dynamic future as an independent, private sector company.
Anyone tuning into the latest reports from BT and the Royal Mail is entitled to ask what went wrong.
Many privatisations, water is a prime example, have failed to turn out as the godparent of the policy, Margaret Thatcher, would have hoped.
Successive BT chief executives have struggled with a ‘blancmange layer’ of bureaucracy which made change at the telecoms giant so formidable.
The Royal Mail is dogged by post-Thatcherite militancy from the Communication Workers Union (CWU), which has driven successive chief executives to distraction. Simon Thompson is the latest to go, after a bruising reign.
Lacking intelligence: BT, chief executive Philip Jansen wants to slash 55,000 jobs and turn to AI technology to run the telecom giant
At BT, chief executive Philip Jansen, who values his work-life balance, has decided to become Britain’s first artificial intelligence apostle. He is proposing to take a meat axe to the workforce, slashing 55,000 jobs, some 40 per cent of staff, by 2030.
By then, one suspects, he will have long retreated to Cornwall and a slice of the jobs being divested will be replaced by AI.
Consumers already having to deal with BT’s often unhelpful, impenetrable, inflexible customer service and rapacious billing (contracts which have to be paid long after service has been removed) might find this a little scary.
Doubtless, it will be explained to those facing the scrapheap that being replaced by AI and losing their careers and livelihoods is a terrific benefit to the human race.
What has spurred Jansen into action is not clear but one suspects activist Patrick Drahi, who spent £2.2billion on acquiring an 18 per cent cent stake, may be a factor.
Certainly, steps are needed to be taken to revive a stagnant share price.
However, the 5 per cent slump in latest trading hardly signals tremendous confidence that a corner is being turned.
So, four years after taking the helm, Jansen is assuring everyone that ‘New BT’ (a phrase familiar to the Labour lexicon) ‘will be a leaner and brighter business’.
How does Jansen or anyone else involved in the AI experiment know? Amid the hoopla there are known knowns.
Free cash flow at the telecoms concern was at the bottom end of the £1.3billion target. Revenues fell to £20.7billion but were above forecast.
Meanwhile, the great project to bring the UK full fibre to the door lumbers on, way behind many overseas competitors including South Korea and Spain.
That is hardly going to advance Rishi Sunak’s project to make Britain the next Silicon Valley.
Spare us the corporate speak and give Britain the broadband and mobile signal which actually works in central London.
Which brings us to the Royal Mail. There is no doubt that dealing with the CWU and modernising the sorting and delivery services has been a decade-long nightmare which defeated the indefatigable Moya Greene and the entrepreneurial Rico Back.
Nevertheless, for the management to blame a £1billion loss, after writedowns, just on posties is a bit rich.
Proprietor International Distributions Services argues that it swung to loss ‘due to industrial action’ by unionised staff. A fairer account might have highlighted management culpability.
Royal Mail’s clumsy negotiating sacrificed the reliability of the universal postal service.
Just 73.7 per cent of first class deliveries arrived on time in 2022-23 (20 full points below the official 93 per cent target), which triggered an Ofcom investigation.
Amid terrible industrial relations, missed targets, whopping losses and management mayhem, we are assured by chairman Keith Williams that it is on ‘a clear path towards a more profitable Royal Mail’. Sure!
The reported stand-off between the Treasury and the Bank of England over giving fintech pioneer Revolut a banking licence is a proxy battle relating to Government post-Brexit ambitions.
The Bank is super-cautious about offering the pathway to a licence while its accounts are still being finalised with auditors BDO and amid concerns about financial stability after the failures of Credit Suisse, SVB and First Republic.
Jeremy Hunt and the Treasury are on a mission to relaunch Britain as a tech and financial services superpower.
Bank regulator Sam Woods, who heads the Prudential Regulatory Authority, is right to tread carefully.
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