ALEX BRUMMER: BT boss Phillip Jansen embraces the AI myths

Some 43 years have passed since BT was spun off from the Royal Mail, poised for a more dynamic future as an independent private sector company.

Anyone tuning in to the latest reports from BT and the Royal Mail has a right to ask what went wrong.

Many privatisations, water being a good example, have not materialized as the godfather of the policy, Margaret Thatcher, had hoped.

Successive BT CEOs have struggled with a ‘blankmange layer’ of bureaucracy that has made change so formidable at the telecom giant.

The Royal Mail is dogged by post-Thatcherian militancy from the Communication Workers Union (CWU), which has driven successive chief executives to distraction. Simon Thompson is the last to leave, after a bloody reign.

At BT, CEO Philip Jansen, who values ​​work-life balance, has decided to become Britain’s first Artificial Intelligence Apostle. He proposes to cut 55,000 jobs by 2030, about 40 percent of the workforce.

By then, it is suspected, he will have long since retired to Cornwall and some of the jobs being shed will be replaced by AI.

Consumers already dealing with BT’s often unhelpful, impenetrable, inflexible customer service and predatory billing (contracts that have to be paid long after the service has been removed) might find this a little scary.

No doubt those facing the scrap heap will be explained that being replaced by AI and losing their careers and livelihoods is a tremendous benefit to humanity.

What prompted Jansen to take action is not clear, but activist Patrick Drahi, who spent £2.2bn acquiring an 18 per cent stake, is suspected to play a role.

Certainly, steps are needed to revive a stagnant stock price.

However, the 5 percent slump in the last trade hardly indicates huge confidence that a corner is being turned.

So, four years after taking over, Jansen assures everyone that ‘New BT’ (a phrase familiar to the Labor lexicon) ‘will be a leaner and brighter company’.

How does Jansen or anyone else involved in the AI ​​experiment know? Amidst the hoopla, there are familiar acquaintances.

Free cash flow at the telecom group was at the lower end of its £1.3 billion target. Turnover fell to £20.7 billion but was above expectations.

Meanwhile, the big project to bring the UK full fiber to the door is looming, well behind many foreign competitors, including South Korea and Spain.

That will hardly help Rishi Sunak’s project to make Britain the next Silicon Valley.

Spare us the corporate talk and give Britain the broadband and mobile signal that really works in central London.

Snail mail

Which brings us to the Royal Mail. There is no doubt that dealing with the CWU and modernizing its sorting and delivery services has been a decade-long nightmare that beat the tireless Moya Greene and the enterprising Rico Back.

Nevertheless, it is a little rich to blame management for a loss of £1 billion, after depreciation, on stamps alone.

Owner International Distributions Services claims the loss was “due to industrial action” by unionized workers. A fairer account might have emphasized management’s guilt.

Royal Mail’s clumsy negotiations have sacrificed the reliability of the universal postal service.

Only 73.7 per cent of first class deliveries arrived on time in 2022-23 (20 full points below the official target of 93 per cent), prompting an Ofcom investigation.

Amid terrible labor relations, missed targets, colossal losses and managerial chaos, Chairman Keith Williams assured us it is ‘on the right track to a more profitable Royal Mail’. Certainly!

license battle

The reported standoff between the Treasury and the Bank of England over the granting of a banking license to fintech pioneer Revolut is a proxy battle over the government’s post-Brexit ambitions.

The bank is extremely cautious about offering the path to a license as its accounts are still being finalized with accountants BDO and amid financial stability concerns following the failures of Credit Suisse, SVB and First Republic.

Jeremy Hunt and the Treasury are on a mission to relaunch Britain as a technology and financial services superpower.

Banking regulator Sam Woods, head of the Prudential Regulatory Authority, is right to proceed with caution.