BT, the UK's largest broadband provider, is poised for a significant transformation that could see even deeper job cuts than previously announced, driven by advancements in artificial intelligence. The telecoms giant had already outlined plans to reduce its workforce by 40,000 to 55,000 employees and contractors by the end of the decade, aiming to become a "leaner" business and strip out £3 billion in costs. However, current chief executive Allison Kirkby revealed in a recent interview that this initial plan "did not reflect the full potential of AI," suggesting that depending on what BT learns from AI implementation, the company "may be an opportunity for BT to be even smaller by the end of the decade." This perspective builds on the vision of former CEO Philip Jansen, who had also envisioned a much smaller workforce and cost base.

Kirkby, who assumed leadership from Jansen last year, has been actively steering BT towards a more streamlined operational model. This strategic push includes divesting non-core assets such as its Italian business and its Irish wholesale and enterprise unit. Recently, BT further refined its structure by spinning off its international business into a separate division. Reports indicate that BT remains open to offers for this newly separated international arm, signaling a clear focus on strengthening its core operations within the UK market.

Beyond workforce and operational restructuring, Kirkby also expressed concerns regarding the market's valuation of Openreach, BT’s crucial broadband network business. She stated her belief that the value of Openreach is not adequately reflected in BT’s current share price. Should this disparity persist, Kirkby indicated that BT would "absolutely have to look at options," implying a potential spin-off of the network business. She clarified that any decision to reconsider Openreach's status would likely occur after the completion of its ambitious full fibre network upgrade. Nevertheless, Kirkby's preferred outcome is for BT's share price to naturally reflect Openreach's intrinsic worth, rather than pursuing a spin-off.

In a separate development, it was reported last week that BT is exploring a potential takeover of TalkTalk, a smaller rival in the telecoms and broadband sector. TalkTalk currently serves approximately 3.2 million customers but has faced significant challenges since it was acquired by Toscafund, a London-based investment firm, in a £1.1 billion deal in 2021. This transaction notably added £527 million of debt to TalkTalk's balance sheet, contributing to its struggles. A potential acquisition of TalkTalk would further reshape BT's market presence and customer base in the competitive UK telecommunications landscape.