BT's Global Services head Alvarez to oversee Europe: source

A man speaks on a mobile phone underneath a BT logo outside of offices in the City of London, Britain, January 24, 2017. REUTERS/Toby Melville

LONDON (Reuters) - Luis Alvarez, the head of BT's BT.L multi-national corporate division, will take direct responsibility for the firm's European business following an Italian accounting scandal, a person familiar with the situation said.

The British telecom firm warned on profits on Tuesday, in part due to the discovery of a 530-million-pound ($667 million) black hole at its Italian operations, wiping more than a fifth off the firm’s value and damaging its reputation.

BT said on Tuesday that managers at BT Italia had now left the company and that it would have a new chief executive in place there by Feb. 1. The new Italian head will report to Alvarez.

BT’s current head of Europe Corrado Sciolla was expected to leave the firm shortly, the person familiar with the situation said, adding that no changes had yet been finalised.

Sciolla, previously the CEO of BT Italy and president of BT France, reported to Alvarez. The source said he was not thought to have known about the Italian scandal but that he would take responsibility for it.

Alvarez, a Spaniard, was appointed CEO of BT Global Services in 2012 and has helped rebuild the unit, growing its earnings after it reported large profit warnings in 2008 and 2009.

Global Services provides communications and IT services to multi-national corporations and governments around the world.

BT Italia operates a 16,000 km fiber network that covers the whole of Italy, serving 1,000 large companies including Fiat and Mediaset.

Reporting by Kate Holton, Editing by Paul Sandle