BT is to cut 13,000 jobs over three years, about 12% of its workforce, as it seeks to slim down its management and back-office roles.
The telecoms giant said that the job cuts and other measures would help it to reduce costs by £1.5bn.
It added that it would be hiring about 6,000 employees to “support network deployment and customer service”.
A third of the job reductions will come from outside the UK in its Global Services division.
Last year, BT was forced to write down the value of the Italian part of Global Services after an accounting scandal that cost the firm more than £500m.
The company also said it intended to move out of its existing central London headquarters and into smaller premises.
BT forecast a fall in revenue of about 2% for the 2018-19 financial year. It also said it was keeping its full-year dividend unchanged from last year at 15.4p a share and would freeze it for the next two years.
Shares in BT fell nearly 8% in early trading.
Philippa Childs, national secretary of the Prospect union, said the announcement was “a devastating blow to managers and professionals represented by Prospect”.
She said Prospect had been working closely with BT on looking at the impact of organisational changes, but the number of job cuts sounded “unrealistic”.
‘Lean and agile’
BT said it was responding to changes in the telecoms market, including “increasing competitive intensity from established companies and new entrants”.
“It is critical that BT transforms its operating model to build a lean and agile organisation that delivers sustained improvement in customer experience and productivity,” it said.
The announcements came as BT disclosed that its annual pre-tax profits rose 11% to £2.6bn in the year to March.
The firm also announced a 13-year plan to plug its £11.3bn pension fund deficit, including regular payments into the scheme and a bond issue.
Chief executive Gavin Patterson said BT was in a unique position: “We have the UK’s leading fixed and mobile access networks, a portfolio of strong and well segmented brands, and close strategic partnerships.
“This position of strength will enable us to build on the disciplined delivery and risk reduction of the last financial year, a period in which we delivered overall in line with our financial and operational commitments whilst addressing many uncertainties.”
George Salmon, equity analyst at Hargreaves Lansdown, said the job cuts and HQ move were “drastic actions”, but added that they “still aren’t going to be enough to dig BT out the hole it’s in”.
“The dividend, which was rising 10% a year not so long ago, is set to freeze for the foreseeable future, and next year’s profits look likely to fall again,” he added.
“There are silver linings here and there. For example, EE and the consumer businesses continue to grow. However, these improvements are being more than offset by challenging conditions elsewhere.
“Openreach terms are getting tougher, and the business-to-business and global divisions are having a torrid time. Gavin Patterson will have his work cut out if he’s to steady the ship.”
Analysis: Rob Young, business reporter
BT’s share price has halved over the past two years. Investors have become less convinced about the company’s ability to make them money, after an accounting scandal, a profits warning and a regulatory fine.
BT clearly thinks it has too many staff doing jobs not needed in the digital world. Its wide-ranging corporate shake-up is an attempt to simplify the business, to squeeze more profit out of each pound it spends.
It’s under pressure to pump more money into fibre optic and super-fast mobile networks and to fill the black hole in its pension scheme. It has made more efforts on those fronts today.
Thousands of new hires will be engineers and cyber-experts, focusing not on copper cables, but on building the physical and mobile networks of the future. It’s also trying to improve its customer service and mend relations with the regulator.
It’s a big job, turning a former monopoly into a consumer-focused TV and phone company. Shares are down sharply, suggesting investors are yet to be convinced by BT’s plan.
BBC contributed to this report.