BT chief executive Allison Kirkby has refused to rule out redundancies among 900 Talktalk employees joining the telecoms giant, defending its controversial takeover of the broadband provider as an “unprecedented” rescue.

The FTSE 100 boss told reporters she could not guarantee the jobs would be protected while the deal remained under regulatory review, as BT presses ahead with its own sweeping workforce reductions.

The company acquired Talktalk’s consumer and wholesale businesses out of administration last month, taking on services used by 2.5 million customers in a deal expected to cost around £400m this financial year.

But the rescue has sparked a backlash from rival Virgin Media O2, which branded it a “stitch up masked as a rescue deal”, amid concerns that it could strengthen BT’s grip on Britain’s broadband market and ultimately push up prices.

Bloomberg Intelligence estimates the acquisition could increase BT’s share of the fixed broadband market from around 29 per cent to 35 per cent.

Kirkby defended the takeover, arguing that Talktalk’s imminent collapse had threatened millions of customers and vital public services.

“The Talktalk situation was an unprecedented and, you know, extraordinary situation that, you know, after an extended attempt to sell it – it was a real and immediate risk of liquidation,” she said in response to a question from City AM.

“So we stepped in to ensure the two and a half million customers, including hundreds of thousands of vulnerable households and critical national services, could stay connected”.

She described the circumstances as “very unique” but declined to address the potential impact on competition while regulators considered the deal.

The acquisition has also raised questions over the future of Talktalk’s workforce, with around 900 employees transferring to BT at a time when the telecoms giant is cutting thousands of jobs.

Kirby offered no assurance that the incoming staff would be spared from further reductions, saying “I can’t comment at this time because it’s under a regulatory review”.

BT revealed on Thursday that its workforce, including contractors, had shrunk 11 per cent to 90,000 over the past year, helping deliver £312m in annual savings.

The company plans to reduce its workforce to between 65,000 and 70,000 by 2030, excluding its international operations, as part of Kirkby’s wider overhaul of the former state monopoly.

Government decision expected soon

The takeover remains under government scrutiny after culture secretary Lisa Nandy intervened on public interest grounds, citing the risk that Talktalk’s collapse could disrupt hospitals and other critical infrastructure.

Talktalk, founded in 2003 to challenge BT’s dominance with cheaper broadband deals, had spent years battling mounting debts and declining customer numbers before its rescue.

Despite months of attempts to sell the business, no buyer emerged, leaving BT to acquire its operating companies through a pre-pack administration.

Kirkby said the government’s decision on the deal could be imminent: “There’s no update at this time, but we should expect some update fairly soon”.

The takeover comes amid mounting pressure across the UK’s broadband market, where competition has driven down prices while operators struggle to fund expensive fibre network expansion.

BT’s own consumer broadband revenue per customer fell three per cent in the first half, although Kirkby said declining use of home phones was partly responsible.

“At some point, clearly, the market will settle,” she said. “But for now, we’re happy with how we’re competing in the market”.

Meanwhile, Virgin Media O2, which is grappling with a £22bn debt pile, is reportedly considering using BT’s Openreach network for new customers while scaling back its own fibre expansion plans.

Kirkby declined to comment on the reported discussions but suggested that financial pressures were changing the economics of building competing networks.

She said operators facing constrained investment and persistently high interest rates would increasingly consider “buying rather than building” network access.

BT reported a 12 per cent rise in pre-tax profits to £1.1bn for the six months to September, helped by its cost-cutting programme.

However, its debt pile rose to £21bn, while cash left over after running and investing in the business fell 59 per cent to £236m.

The company has excluded the financial impact of Talktalk from its full-year forecasts, with further details expected later this financial year.