Telecoms group BT has slashed its chief executive’s pay package by £4m as a result of an accounting scandal and revealed it is to axe 4,000 jobs worldwide.

Gavin Patterson will now be paid £1.34m for the year to the end of March, mostly consisting of his annual salary of £993,000. His total pay package represents a 74% reduction on the £5.28m he received for 2015-16. The bonus cut, which also applied to the group’s finance director, is the result of a £530m accounting scandal at the group’s Italian operations.

About 2,000 of the planned job cuts will come from BT’s UK operation, with the cuts falling mostly on managerial and back office personnel. The company currently employs 102,000 worldwide, with the restructuring expected to save the company £300m over two years.

The bonus cuts and job losses follow huge problems at BT’s global services division, which provides IT and communications services to clients ranging from the BBC to Bromley borough council. It also includes the Italian business at the centre of the scandal.

In January, £8bn was wiped off BT’s stock market value after it admitted the scandal was far worse than initially thought and would cost £530m. The company had only recently told investors the cost would be £145m. BT has spent £15m in three months investigating the scandal. BT’s European head, Corrado Sciolla, lost his job as a result of the controversy and was replaced by Luis Alvarez, who is also now leaving.

The profit warning pointed to a sharp slowdown in sales to corporate and public service clients in the UK.

BT said the division was now under review – there has been speculation it may be sold off – although BT has said it wants to try to turn it around before considering a sale.

Patterson and finance director Tony Chanmugam both said they would not have accepted bonuses linked to the company’s performance if they had been awarded.

“I believe as chief executive you need to set an example... I felt it would be inappropriate to take a bonus if one was due,” said Patterson. “As a chief executive, you need to be setting an example for everyone across the business. ”

Tony Ball, the former boss of Sky TV and chairman of BT’s remuneration committee, said the Italian scandal was not the only reason bonuses were withheld. He also pointed to a £42m fine imposed on BT-owned Openreach, the largest ever handed out by the regulator, for issues including blaming broadband installation delays on factors beyond its control but when this was found not to be the case.

“The past year has been challenging,” said Ball. “Although good progress has been made in a number of areas, unfortunately our performance has been significantly affected by the accounting irregularities in our Italian business, the issues that arose in Openreach ... the significant challenges we faced in the UK public sector and international corporate markets. The committee has made a number of difficult decisions this year in light of these circumstances and exercised its discretion accordingly.”

BT also clawed back shares worth £338,398 awarded to Patterson and £193, 412 to Chanmugam.

Details of the bonus cuts and job losses came as BT reported a 19% fall in pre-tax profits to £2.3bn for the year to the end of March.

BT’s TV operation, which includes Premier League and Champions League coverage, signed up just 11,000 new subscribers in the three months to the end of March. BT blamed higher prices for broadband and phones that affected the take-up of the BT TV and sport service.

“It is one of the lowest quarters BT has ever delivered in terms of TV subscriber numbers,” said one City analyst.

Patterson admitted it had been a “soft” quarter , but said audiences were up 12% year-on-year, and that the business should be judged on an annual basis.