Privatised UK state telecom giant, British Telecom, stung by a £134-million full year loss in the last financial year, today said that it would cut another 15,000 jobs over the next 12 months after suffering huge losses at is 'global services' division.

In November, the company had said that it would slash 10,000 jobs by year-end with pre-tax profits tumbling 11 per cent in the first six months of the year. This was over and above the 4,000 jobs already slashed in September.

In a bid to save £1 billion in costs in the coming year, the telecom giant said that the majority of job cuts this time would be in the UK.

BT has axed 5,000 jobs more than what was reported by the media last month. In April, the company had said that it is likely to shed 10,000 jobs and scale back its dividend when it announces its preliminary results in May. (See: British Telecom to cut 10,000 more jobs; slash dividend: report)

The company, which has a total workforce of around 160,000 in 170 countries, said that the performance of Global Services, which employs about 37,000 people, was once viewed as the "jewel in the crown" at BT, but since October, it has triggered two profits warnings.

The company said that it will take charge of £1.3 billion because of the completion of contract and completes financial reviews in BT Global Services.

BT groups finance director Hanif Lalani was replaced by François Barrault last October as the second quarter figures were dismissal and was asked to investigate the books and straighten the financial mess.

After reviewing 15 of the division's biggest contracts, he soon discovered that most of these complex contracts that last several years were contracted with poor returns, where the previous executives had sacrificed profit for growth.

The group will also take a specific item charge of £280 million relating to the restructuring of BT Global Services, further restructuring charges of approximately £420 million in total over the next two financial years

Ian Livingston, chief executive of BT 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 and the resulting charges we have taken. During the year we have changed the leadership of BT Global Services and started to turn the division around.

"With a recovery programme for BT Global Services in place and our heightened focus on costs and customer service, we now want to accelerate our plans for our future networks, he added.

BT expects to deliver a net reduction in operating costs and capital expenditure of well over £1 billion in 2009-10. This will enable the company to generate free cash flow, before any pension deficit payments, in excess of £1 billion in 2009/10 and beyond.

BT will make pension deficit contributions of £525 million before tax relief for the next three financial years after the shortfall rose to £2.9 billion from a surplus of £2 billion a year ago.

BT will also be doubling the pace of the roll out of super fast broadband next year within existing capital expenditure plans, bringing fibre based services within the reach of more than a million homes and businesses and securing the jobs of a thousand BT people. (See: British Telecom to give UK customers 60 Mbps broadband speed)

Looking forward to the financial year, BT said that it expected revenue to decline by 4 per cent to 5 per cent in the 2009/10, reflecting a continuation of the trends seen in the fourth quarter, the impact of lower mobile termination rates, together with the impact of refocusing BT Global Services.