05/06/2003
1,500 UK jobs to go at Cable & Wireless
Cable & Wireless has announced that up to 1,500 jobs are to go in the UK following their huge £3.29 billion losses contained in the latest annual results.
The under-pressure communications company said that axe would fall over an 18 to 24-month period.
In addition to the jobs cull in the UK, the US and Continental Europe saw headcount losses from 3,807 to 2,774 and from 1,390 to 1,136 respectively. C&W has also completed the disposal of domestic business in Sweden, Belgium, the Netherlands, Italy and Switzerland.
The company said that its US subsidiaries "make losses, consume cash and require significant management attention" and so will be divested in the future. C&W say that it will now set about withdrawing from the US and "all options are being explored".
In the UK, revenue declined by 16% in the year to £1.7 billion, with adjusted operating losses of £303 million. This the company says resulted from a decline in the performance of the service provider channel and a refocusing of the business channel on a smaller and more targeted customer base.
C&W say that service provider revenue declined by 22% as some carriers migrated traffic onto their own infrastructure, price competition became more aggressive and the proportion of international voice traffic with lower revenue per minute than mobile traffic increased.
The decision to exit low margin business, announced at the end of 2002, combined with pricing pressure, led to a 25% decline in business revenue. Business accounts have now stabilised, say C&W, with the result that revenue increased by 2% since 30 September 2002.
Globally, C&W closed the year with total cash balances of £3.1 billion, with borrowings of £1.5 billion. The net cash balance of £1.6 billion C&W believes will provide "the necessary liquidity" to carry out its restructuring plans announced today.
Francesco Caio, Chief Executive of Cable & Wireless, said: “In the UK, one of the world’s largest telecoms markets, Cable & Wireless’ market share is second only to BT. Whilst the UK business makes a positive EBITDA, its loss before tax is unsatisfactory. Performance has declined and as a result, we are restructuring the business to drive efficiency, improve our network services and focus the company on building market share with our target customers."
The continuing operating loss to 31 March 2003, before exceptionals and goodwill amortisation, was £207 million from a turnover of £4.2 billion.
The company said that once it implements the restructuring and performance improvement plans, C&W would generate a double-digit operating profit margin.
(GMcG)
The under-pressure communications company said that axe would fall over an 18 to 24-month period.
In addition to the jobs cull in the UK, the US and Continental Europe saw headcount losses from 3,807 to 2,774 and from 1,390 to 1,136 respectively. C&W has also completed the disposal of domestic business in Sweden, Belgium, the Netherlands, Italy and Switzerland.
The company said that its US subsidiaries "make losses, consume cash and require significant management attention" and so will be divested in the future. C&W say that it will now set about withdrawing from the US and "all options are being explored".
In the UK, revenue declined by 16% in the year to £1.7 billion, with adjusted operating losses of £303 million. This the company says resulted from a decline in the performance of the service provider channel and a refocusing of the business channel on a smaller and more targeted customer base.
C&W say that service provider revenue declined by 22% as some carriers migrated traffic onto their own infrastructure, price competition became more aggressive and the proportion of international voice traffic with lower revenue per minute than mobile traffic increased.
The decision to exit low margin business, announced at the end of 2002, combined with pricing pressure, led to a 25% decline in business revenue. Business accounts have now stabilised, say C&W, with the result that revenue increased by 2% since 30 September 2002.
Globally, C&W closed the year with total cash balances of £3.1 billion, with borrowings of £1.5 billion. The net cash balance of £1.6 billion C&W believes will provide "the necessary liquidity" to carry out its restructuring plans announced today.
Francesco Caio, Chief Executive of Cable & Wireless, said: “In the UK, one of the world’s largest telecoms markets, Cable & Wireless’ market share is second only to BT. Whilst the UK business makes a positive EBITDA, its loss before tax is unsatisfactory. Performance has declined and as a result, we are restructuring the business to drive efficiency, improve our network services and focus the company on building market share with our target customers."
The continuing operating loss to 31 March 2003, before exceptionals and goodwill amortisation, was £207 million from a turnover of £4.2 billion.
The company said that once it implements the restructuring and performance improvement plans, C&W would generate a double-digit operating profit margin.
(GMcG)
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