24 February 2000 | Mark Whitehead
Managers at BT have been told not to travel to meetings with suppliers in a crackdown on expenses.
An e-mail sent to staff from the BT management board stated that "non-payroll costs" must be reduced. "We have been asked to implement measures as the first step to improving our competitiveness," it said.
Apart from banning visits to suppliers, the measures stop staff using UK and overseas air travel, first-class rail travel, and overnight hotel accommodation (except in "special circumstances"). They stop them from going to external conferences and on training courses, and from buying mobile phones and some IT equipment.
Other measures targeted spending on hospitality and consultancy services, and limited the employment of agency staff or contractors, unless they were involved in sales or services.
"Following the example of many other companies, from now on BT employees will be expected not to travel to suppliers. Suppliers should travel to BT's premises," the e-mail said.
One manager involved in negotiating contracts at BT told SM that the new rules made his job harder because it tied his hands behind his back.
The move follows a dramatic fall in BT's profits three weeks ago and the announcement earlier this month that 3,000 managers will be made redundant over the next nine months.
This decision to axe one in 10 of the company's managers followed a 6 per cent slump in third-quarter profits last year. Reaction on the stock market led to a drop of more than 17 per cent in the firm's share price.
A BT spokesman said that such cost-cutting policies are common when companies need to save money. "This is a temporary measure until April, when a further decision will be taken," he said.
"We are obviously interested in competitive issues and profitability, so we are always looking at areas where we can scale down cost."
"BT employees can make a case if there are exceptional circumstances and visit a supplier if it is absolutely critical," he added.
But a manager at one of BT's major suppliers said he had never heard of a company banning meetings with suppliers. "If it's a general ban on travel, it will have an impact in the longer term and will put BT managers in a weak position when they're trying to negotiate good deals,"he said.