BT offers a year off for pay cut

London: BT has offered tens of thousands of its employees the chance to go on long-term holiday in return for taking a drastic pay cut.

The former state telecoms company is one of Britain's biggest private employers with 106,000 staff but made a £1.3 billion (Dh7.79 billion) loss in the first three months of the year. It has proposed that employees take up to a year off in return for taking a 75 per cent pay cut, with the reduced salary as an upfront cash payment. It is also offering staff a one-off payment of £1,000 if they switch to part-time work and parents will have the chance to work only in school term times so they can spend holidays with their children.

The radical proposals - which were leaked to The Daily Telegraph - are the latest example of the private sector having to adopt inventive and sometimes desperate measures to tackle the recession by cutting costs without terminating staff.

British Airways has asked staff to work for free during the summer and to go part-time. Many car manufacturers have sent workers home on half pay for months at a time.

BT is still planning to cut 15,000 jobs in the next 12 months but a senior source at the company said the "time out options" would save further job losses. Most divisional managers had been ordered to reduce labour costs by "more than 10 per cent".

BT is Britain's ninth largest employer. One expert said its move could encourage other companies to copy.

"It's already a widespread phenomenon in smaller companies, where there is a feeling that everyone is a family and needs to pull together. But more larger companies will follow suit," said John Philpott, the chief economist of the Chartered Institute of Personnel and Development. It has been suggested that cutting workers' hours and pay - rather than redundancies, is masking the true extent of the job losses.