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Tiscali is to axe 300 British jobs within the next fortnight as part of its bid fuse three ISPs into one UK operation.

The Register understands that the scale of the job cuts in the UK is down to an ultimatum delivered by the Italian telco in which it said it would close down any part of the company that wasn't profitable by Q4 2001.

The threat of closure applies to all of Tiscali's country businesses throughout Europe.

According to documents seen by The Register, becoming EBITDA positive by the end of the year is a top priority for the operation in the UK.

Since the beginning of the year WorldOnline UK and LibertySurf UK have secured the resignations of around 90 staff.

But Tiscali still needs to shed a further 200 jobs if it is to meet its goal of becoming EBITDA positive by the end of the year.

At the end of April, WorldOnline UK, LibertySurf UK and LineOne - all ISPs acquired by the Italian operation - had around 470 employees.

According to insiders, it is looking to trim down its unified operation to just 170 people. The job cuts are due to finalised by June 1.

Insiders also claim that WorldOnline UK CEO, Simon Preston has effectively already left the company although a spokeswoman for the operation maintains he's still on the payroll.

Earlier this week The Register reported that the boss of LineOne, Mary Turner, and her board had been appointed to run Tiscali UK's ISP.

However, Derrick Martin, Business Change director for Tiscali in the UK, denies that the job cuts will be as large as reported although admitted that redundancies were likely.

He also denied that Tiscali SpA had issued any ultimatum concerning Q4 profitability goals.

He also confirmed that LineOne's Turner would head Tiscali's consumer ISP in the UK. The former boss of LibertySurf, Stephan Huet, is to run Tiscali's UK business division.

No one has yet been appointed to run the combined operation in the UK, he said, but an announcement was due shortly.

He said Simon Preston had taken a more internationally-focused job at Tiscali.

Tiscali's UK Strategy and Goal

According to documents seen by The Register, the primary objective for Tiscali's UK business in 2001 is to "successfully integrate a series of acquisitions...[and to] gain synergies and efficiencies."

It is also seeking "to get to break-even whilst ensuring maximum customer retention" and to develop a "sustainable narrowband business model".

As a means to becoming EBITDA positive by Q4 is also intends to "reduce [its] UK cost base".

It also intends to build its own IP Network to the local loop.

Tiscali's European Goals

No surprises here, but having bought up a string of European ISPs over the last couple of years it wants to merge them into one single operation.

It also wants to become a "highly profitable business" and to be one of the top three ISPs and portals in Europe.

It also intends to be a "leader in business services".

The Mood Among Employees

According to insiders, morale is in the basement with many employees simply hanging on in the hope that they will receive the generous redundancy package on offer from Tiscali. The Italian telco might be able to talk of a single, unified company in its flip-chart presentations, but the truth remains that behind the unified brand lies division.

In the UK at least, employees from the separate companies don't mix.

Said one insider: "It sounds silly but for a communications company no one actually talks with each other. Within the company the mood is that every company is still completely separate. There's no real mixing between any of the old companies."

Another said: "No one will make any decisions. None of the directors wants to stick their neck out and spend any money. As a result nothing is getting done and most people seem to be getting more and more fed up with the situation," said another. ®

Related Stories

LineOne bosses to head Tiscali's UK ISP

World Online/Tiscali begins 'massacre of UK employees'

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