BT Group, the largest ICT-related employer in the UK, has suspended its graduate recruitment programme, citing pressure to reduce headcount.
In recent times, the company has typically hired around 200 graduates each year. While it will honour its commitment to graduates hired this year, there is no timetable for reintroducing the programme.
"In light of the current economic environment and headcount pressures, BT has taken the decision to cease graduate recruitment activity and are [sic] no longer running a graduate recruitment programme,” the company said in a statement.
The company, which employs around 100,000 people, cut 15,000 jobs last year (mainly among contractors) and expects to do the same in 2009.
But while the numerous job cuts and now its graduate hiring freeze are inevitably seen in the context of the recession, in fact BT’s troubles predate the credit crunch.
BT’s main headache is its Global Services division, which lost £124 million in the most recent financial quarter. That drastic loss, down from £1 million profit in the same quarter of last year, is the cost of a rationalisation programme currently underway to weed out unprofitable IT services contracts signed or maintained during the tenure of Francois Barrault. The former CEO of Global Services, who resigned in October 2008, has been heavily criticised for his management of the division.
Meanwhile, some analysts argue that the biggest drain of BT’s profitability is a horde of salaried network engineers trained in skills that are no longer applicable.
Like many IT services companies, BT is currently trying to negotiate the move to global delivery (i.e. using more Indian staff) in the face of considerable opposition from trade unions.
Cutting off intake at the bottom of the organisational chart is one way to relieve this pressure, but critics worry that this will create a shortage of IT middle management in future, both for BT in particular and the UK in general.