BT CEO Gavin Patterson to leave company following investor kickback

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BT has announced that chief executive Gavin Patterson will leave the telecoms giant later in the year after reports of growing shareholder dissatisfaction with his performance.

BT said Mr Patterson, who has led the firm for five years, would remain in his post until a successor is chosen later this year.

Mr Patterson expanded BT beyond its core business by investing in its TV arm and buying football broadcast rights.

However, he added: "The broader reaction to our recent results announcement has, though, demonstrated to Gavin and me that there is a need for a change of leadership to deliver this strategy".

Patterson said 15 months ago that BT had been taken aback by the flak it had received about the company's customer service and its networks, and he vowed that its millions of customers would see improvements.

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Patterson, who has run BT for nearly five years, announced 13,000 job cuts last month in an attempt to get to grips with a host of problems including intense competition, an underperforming IT services unit, a huge pension deficit and criticism of its broadband plans.

BT shares plummeted after it was announced, and are now trading near a six-year low.

BT's shares opened over 2% higher on Friday morning after news of Patterson's exit broke.

The fact that Openreach is still owned by BT and has avoided being spun-out is also a boon for the firm.

Unfortunately, Patterson also presided over the ongoing problems at BT Global Services - the organisation's IT services organisation that has long weighed heavily on the group's bottom line - and the fall-out from a major accounting scandal at its Italian operation also damaged him, as did the widening deficit in BT's pension plan. However, it's been a different story over the last two years.

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During his tenure at BT, Patterson steered the organisation through a gruelling Ofcom Market Review that ultimately resulted in the legal separation of BT from its network infrastructure business Openreach.

But the subsequent decline in the share price showed investors were not on side.

Last month the group revealed it would be slashing thousands of back office jobs as part of its £1.5bn cost cutting initiative and would be relocating its headquarters away from central London.

Analysts at UBS said the fact that the board supported the strategy suggested no significant strategic changes.

Since Patterson took over the reins in 2013, BT's share price has fallen by 41%.

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"BT is a great business and, with the new management team I've recently put in place, is, I believe, very well positioned to thrive in the future", he said.

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