BT has lowered its earnings guidance and reduced its outlook for dividend growth to reflect the tough start to the year when it has been plagued by a number of issues notably the accounting scandal in its Italian operation.

The company also said it would cut 4,000 jobs in back office and managerial roles over the next two years at a cost of £300m.

Luis Alvarez, head of BT’s international operations for five years, will leave the company to be replaced by Bas Burger and confirmed reports that management will cede bonuses and miss out on share awards largely as a result of the crisis.

BT said that it now expects earnings before interest, taxation, depreciation and amortisation in the current financial year to be as low as £7.5bn compared to £7.6bn in the year to March when it grew 18 per cent but missed expectations of a £7.9bn profit.

BT also toned down its dividend growth guidance for the year to “progressive” from its 10 per cent range.

Gavin Patterson, chief executive of BT, said that the company had made progress in a number of areas but that the issues at Global Services and fines by Ofcom for failings at Openreach, its networking division, meant the company had fallen short of the “high standards we expect.”

It is reviewing its international arm to retreat from a number of markets.

“We take these issues extremely seriously and are putting in place new measures, controls and people to prevent them happening again,” he said.

Mr Patterson and the former finance director Tony Chanmugam have forgone bonuses as a result of the Italian scandal with share awards also reduced.

Mr Patterson’s total pay for the year dropped to £1.3m from £5.3m in the previous year while Mr Changmugam, who left last year, saw his remuneration fall to £258,000 from £2.8m.

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