A company that can get rid of 35,000 jobs without hurting its business is a company that is too fat. BT has cut that number over the last two years and regained investor confidence in the process: last year the company returned to profit even as revenues fell. But sometimes, negative consequences are simply delayed. BT’s unionised workers are threatening to strike.

Chief executive Ian Livingston is in an unenviable position. Cost-cutting is the Scottish accountant’s shtick: he hacked out about £2bn or 15 per cent of operating costs in the year to March and has promised to save another £900m this year. If he blinks first and offers a bigger pay rise to avoid the strike, Mr Livingston risks losing that reputation. Higher labour costs could also hamper BT’s ambitious plan to roll out high-speed fibre to 66 per cent of the country for just £2.5bn. Investors were already nervous that BT’s cost estimates were optimistic. A protracted strike, though, could delay the roll-out and make it harder to catch rival Virgin Media. And while the public would not be as affected as they were in the 1980s strike, the disruption could damage BT’s efforts to improve its much-criticised customer service.

BT insists it is not trying to “break” the union à la Willie Walsh at British Airways. In that case, it should take advantage of legal problems that forced the union to cancel its strike ballot in Monday. It is time to negotiate a face-saving way out: longer-term pay promises, for example, along with improved working conditions. Its neighbour France Telecom on Monday offered a warning of the dangers of allowing unhappiness to fester: after a spate of suicides became a national crisis, the company has announced a new programme to keep employees happy, at a cost of €900m.

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