BT has announced it is cutting 10,000 jobs in a bid to improve profitability.

Most of the job cuts will come from indirect labour, such as subcontractors and offshore workers. BT has already let go 4,000 workers and the remaining 6,000 cuts will be complete by the end of its financial year on March 31.

BT's overall revenue increased to £5.3bn for the second quarter ending September 30, up 4 percent from the same period a year prior. But operating profit before specific items and leaver costs was down 1 percent compared to the same quarter a year prior, to £744m.

"In today's environment and today's economy, that's not the worse result you'll see, but we were of course disappointed," said Ian Livingston, BT's chief executive.

BT said three of its main business units - BT Retail, BT Wholesale and Openreach - met expectations for the company's second quarter and half-year results. But BT Global Services, which provides networked IT services to enterprises, suffered from increasing costs which cut into its profit.

Revenue for Global Services came in at £2.1bn for the quarter, up from £1.9bn a year prior. But profit fell to £611m from £663m, an eight percent decline.

The head of Global Services, Francois Barrault, resigned from his position October 30 and has since been replaced by Hanif Lalani, who was group finance director. BT said Global Services still had compelling products, citing a total of £8.4 billion in new contracts over the last year.

One of BT's major infrastructure projects, the 21st Century Network, is now serving eight percent of the UK market with wholesale broadband services up to 24 Mbps. By April 2009, BT plans to deliver those services to 40 percent of the market and 60 percent by March 2010, the company said.

BT also cited progress with its fiber optic broadband program even though the UK has been relatively slow in installing faster broadband infrastructure. BT is installing fibre to homes in Ebbsfleet, a city east of London, that can theoretically handle speeds up to 100Mbps.

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