BT to spin out procurement company with base in Dublin

13 Nov 2020

Image: © Игорь Головнёв/

As part of efforts to save £2bn by 2025, BT has told suppliers that it will be creating a spin-out procurement company based in Dublin.

BT has said it will radically change its existing procurement capability with the establishment of a new subsidiary based in Dublin. The telecoms firm recently wrote a letter to suppliers to inform them that a spin-out procurement company will be created in the Irish capital.

Operating as a standalone entity, the new company will be led by BT Group’s chief procurement officer, Cyril Pourrat, and is part of efforts to cut costs by £2bn by 2025. In the letter, Pourrat said spinning out the procurement business will allow for “simplifying processes and introducing breakthrough AI-powered digital technology so we’ll truly be best in class”.

“The [new company] will be led by me and based in Dublin, which has established itself as a hub for many big tech businesses as well as start-ups,” he said to suppliers.

“We have a number of steps to work through internally, including a consultation process with our colleagues, and we will be back in touch with a further update as this process evolves.”

BT Group already has a large presence in the country with BT Ireland.

‘The feel of a start-up’

According to The Irish Times, the new company’s annual budget will be €14.5bn and, speaking with the newspaper, Purrat said it will have “the feel of a start-up and all the excitement and energy that goes with it”.

It will look to establish partnerships with other European telecoms companies and allow the British company to have continual access to EU markets.

Last month, BT published its latest quarterly earnings, which included an optimistic forecast for the current financial year. While the company’s adjusted earnings up until 30 September fell by 5pc to £3.7bn, the lower end of its earnings outlook for the year was increased from £7.2bn to £7.3bn.

Speaking at the time, BT chief executive Philip Jansen said that it has achieved “strong operational performance during exceptional circumstances”.

“We continue to invest to make BT more competitive and I’m pleased to see the quality of our products and services improving,” he said. “At the same time, we are firmly on track with the delivery of our modernisation programme and have delivered £352m in cost savings in the first half of the year.”

Colm Gorey was a senior journalist with Silicon Republic