BT announced a restructuring of the business where 13,000 jobs will be cut in a bid to £1.5 billion over the next three years with restructuring costs at £800 million.
"The broader reaction to our recent results announcement has. demonstrated to Gavin and me that there is a need for a change of leadership to deliver this strategy", he said.
BT said in a statement on Friday that it has already started the search for his replacement, noting that Patterson will remain in charge of the company until a successor is found. The company said he would "not now be receiving the 2018 incentive share plan award", which was set out in the latest annual report. Shareholder confidence has followed the share price down, and with BT embarking on a crucial restructure, the board has decided it's time for a change.
"Patterson has paid the price for his losing battle with Ofcom over Openreach, and failure to recognize the investment tide was moving against BT's previous cash flow targets", Guy Peddy, an analyst at Macquarie, wrote in a note.
"I am confident that, for the remainder of his term, Gavin and his senior management team will continue to display the energy required to deal with every dimension of the task at hand", he said.
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Mr Patterson became managing director of BT's consumer division in 2004.
He managed to avoid a full break-up of the group by agreeing to legally separate Openreach, but he admitted he had been taken aback by the flak BT had received about its customer service and its networks during the bitter two-year battle.
Mr Patterson's departure will end a near-five year stint as chief executive, having been at BT for a total of 14 years.
"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".