BT Group
BT practices autophagy at scale: cut 6% of workforce, drop revenue 2%, grow EBITDA 1%, target £3B free cash flow building fiber moats.
BT Group is executing autophagy at infrastructure scale. Revenue dropped 2% to £20.4 billion in fiscal 2025, but adjusted EBITDA rose 1% to £8.2 billion—the company is deliberately shrinking revenue to fund network transformation. The five-year cost program that ended March 2025 extracted £448 million in restructuring charges, primarily cutting labor. Total workforce declined 6% to 111,000 employees, with network energy usage down 5%. This is selective tissue sacrifice: shed legacy copper infrastructure and redundant labor to build fiber networks that generate higher returns per customer.
The new £3 billion transformation program (running through fiscal 2029) demonstrates apical dominance in capital allocation. BT is building fiber to 25 million premises while simultaneously reducing capital expenditure by over £1 billion from fiscal 2026 levels. How? Pruning lower-return investments (copper maintenance, legacy systems) and concentrating resources at growth tips (fiber, 5G). Openreach repair volumes dropped 13% year-over-year in H1 fiscal 2026, not from declining customer base but from superior fiber reliability. Better infrastructure requires less maintenance, freeing capital for expansion. This mirrors how organisms invest in durable structures (shells, exoskeletons) that reduce ongoing metabolic costs.
BT's biological strategy is visible in free cash flow trajectory. Normalized free cash flow hit £1.6 billion in fiscal 2025 (up 25%) and targets £3 billion by end of decade. The company is building infrastructure moats while competitors chase revenue growth. Vodafone and other European telecoms announce network investments; BT delivers them ahead of plan, with £247 million in gross cost savings during H1 fiscal 2026 (£1.2 billion cumulative in first 18 months of the £3 billion program). The competitive dynamic: BT accepts short-term revenue declines to build long-term network dominance. Organisms that sacrifice immediate reproduction for better survival structures outlast those optimizing for current-period fitness.