BT has announced that the head of its Global Services arm, which provides IT services to many high-profile businesses and government institutions, is to resign after the company warned of a sharp decline in profit at the division.

Francois Barrault, who took the position as BT Global Services’ chief executive in April 2007, is to leave the company altogether. He will be replaced by current group financial director Hanif Lalani.

Last week, BT issued a profit warning for the Global Services division. While BT Global Services grew revenues for its most recent quarter will by 15% in its forthcoming financial results, the company said that quarterly profits are expected to be down to £120 million – well below expectations.

The company said that cost savings it had expected to make during the quarter had not materialised.

"BT is performing in line, with or ahead of, expectations in all but one of its divisions, so the results in BT Global Services are particularly disappointing,” said BT CEO Ian Livingstone. “We acknowledge that the performance in this part of the group is unsatisfactory, and are committed to taking decisive action to rectify the situation."

BT’s shares dropped sharply after the company issued its profit warning. The share price fell by 19% to the lowest it has even been since the company floated in 1984.

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