BT has revealed plans to significantly reduce the number of people working for the telecoms group as part of efforts to cut costs and bolster profitability, with artificial intelligence (AI) due to replace thousands of roles.

While outlining annual results, the company said it saw its “total labour resource” being reduced from 130,000 to between 75,000 and 90,000 by the end of the decade under a “rolling plan”.

It said the numbers affected – 55,000 at the top estimate – included its own employees and third-party contractors.

The company added that the total current workforce of 130,000 people included 30,000 non-staff.

It did not provide a breakdown in its estimates of how many direct employees would be affected by the cuts but BT hoped the reduction could be completed mostly through natural attrition rather than redundancy.

Chief executive Philip Jansen told investors he expected that AI technology would replace around 10,000 roles.

He said that after its fibre roll-out is completed and digitising the way it worked more broadly, BT would rely on a much smaller workforce and significantly reduced cost base by the end of the 2020s.

“New BT Group will be a leaner business with a brighter future,” he said.

He explained that BT would use AI to deliver better customer service and capture other business opportunities.

Please use Chrome browser for a more accessible video player


2:40

Calls for pause in AI research

“We’re not going to be in a situation where people feel like they’re dealing with a robot,” he said.

“We’ve got multichannel, we’re online, we have got 450 stores, that’s not planning on changing.”

BT announced the scale of its workforce reduction ambitions just days after UK rival Vodafone revealed plans to shed 11,000 jobs.

The Communication Workers Union (CWU), which launched a series of strikes over pay at BT last year until an agreement was struck in November, said the company’s jobs announcement came as “no surprise”

A spokesperson added: “The introduction of new technologies across the company along with the completion of the fibre infrastructure build replacing the copper network was always going to result in less labour costs for the company in the coming years.

“However, we have made it categorically clear to BT that we want to retain as many direct labour jobs as possible and that any reduction should come from sub-contractors in the first instance and natural attrition.”

Read more from business:
Water firms apologise for sewage discharges and vow to spend £10bn cleaning up their act
No evidence supermarkets are profiteering – and this is why

The company had warned last year that major job losses were likely as it grappled with the impact of soaring, energy-driven inflation.

The annual results met market expectations, with a 5% rise in full-year adjusted core earnings of £7.9bn – its first growth in six years.

However, free cashflow in the year to March fell 5% to £1.3bn due to increased cash capital expenditure.

Shares opened 9% lower.