BT has closed its graduate recruitment scheme amid a cost-cutting programme that will see thousands of jobs shed this year.
The move comes in the wake of warnings from unions and MPs that Britain risks a repeat of the 1980s, when it lost a generation to unemployment, as a record number of young people are out of education, work or training.
Statistics published this month by the Department for Children, Schools and Families showed that about 835,000 people aged between 18 and 24 in England are not in work, education or training. A year ago the figure was 730,000.
BT confirmed the closure of its graduate recruitment scheme – a rare step for a blue-chip employer – in a statement at the weekend.
“In light of the current economic environment and headcount pressures BT has taken the decision to cease graduate recruitment activity. At the present time, there is no timeline for re-entry,” the company said.
Over the past decade such schemes have become increasingly popular, with swelling ranks of graduates fighting over fewer places. BT had 4,800 applications for its graduate training scheme in 2008-09, up from 3,800 applications in 2006-07. It offered 130 jobs.
According to the Association of Graduate Recruiters, graduate jobs have been cut by one quarter this year and 48 graduates will compete for every job on offer.
BT, which employs more than 100,000 people and is Britain’s ninth-largest employer, said it remained committed to its 2009 graduates who start this September for a two-year training programme. In the legal and finance departments the scheme lasts three years.
Several of BT’s top executives were recruited through the graduate training programme, including Hanif Lalani, the head of BT’s Global Services arm, who joined as a trainee in 1983.
Many other companies have been cutting back on the number of trainees they take on as the downturn puts pressure on budgets. Some law firms have offered their trainees cash payments in return for delaying their start dates.
BT reported a pre-tax loss of £134m for 2008-09, compared with a profit of £2bn in 2007-08, because of severe problems at Global Services, the division serving the telecoms needs of multinationals.
The company has implemented a pay freeze for its 85,000 UK staff, including senior management, blaming the move on the economic downturn and the group’s need to cut costs. Staff have also been invited to take long-term holidays on 25 per cent pay.
