BT is encouraging staff to take 12-month sabbaticals at 25 per cent of their current salary in an effort to trim costs.

The news follows a statement in May that the telco had lost £977m in the three months to 31 March, compared to a profit of £426m a year earlier. BT also announced 15,000 job cuts.

The flexible working package will be entirely optional, BT said, and will be rolled out as a limited pilot at this stage, and not to all 106,000 staff immediately.

"BT has a tradition of innovation for flexible working practices, and is piloting a number of special leave options in order to reduce labour costs during these challenging economic times," said a spokesman.

"BT's working practices include broadband-supported home working, as well as secondments to, and from, other organisations. These are innovative ways to help keep employees during these tough times."

The company's increasingly tight resources has also led it to drop the rollout of the controversial Phorm behavioural advertising technology.