The company has been working through a transformation plan to build a national fibre network under boss Philip Jansen, as well as rolling out high-speed 5G mobile services.

The former state monopoly reported on Thursday pro forma revenue and core earnings growth for the first time in six years in the year to the end of March, but the cost of transforming the business, and the hit to its free cash flow took a toll, sending its shares down more than 8% in early trade.

Jansen said after completing the fibre rollout, digitising the way it worked, adopting artificial intelligence (AI) and simplifying its structure, BT would rely on a much smaller workforce and significantly reduced cost base by the end of the 2020s.

“New BT Group will be a leaner business with a brighter future,” he said.

The group’s total number of workers would reduce from 130,000 to between 75,000 and 90,000 by its 2030 financial year at the latest, it said. Some 30,000 of its current employees are contractors.

By that time, the bulk of its full-fibre network build will be completed.

On the full-year results, Jansen said BT had made good progress while navigating an “extraordinary macro-economic backdrop”.

It met market expectations with a 5% rise in adjusted core earnings of £7.9 billion (US$10 billion) after growth in networks and consumer businesses offset a decline in the enterprise.

But free cash flow (FCF) fell 5% to £1.3 billion, at the lower end of its guidance, due to increased cash capital expenditure. Forecasts for free cash flow for 2024 were also lighter than analysts had expected.

“We expect a negative share price reaction on the lower FCF,” Barclays said.

The group’s networks arm Openreach reaffirmed its target to reach 25 million premises with ultrafast full-fibre connections by the end of 2026.

It has been investing heavily to build out its fibre network faster than rival Virgin Media O2 and smaller “alt nets”.

BT said it expected to grow both revenue and core earnings on a pro forma basis this year.