Cable & Wireless slashes 1,500 jobs
'Far too many people'
Cable & Wireless has announced 1,500 new job cuts after announcing lower than expected full-year revenue.
The telecoms company said the cuts would be made over 18-24 months. But speaking on CNBC on Wednesday, Cable & Wireless Chairman Richard Lapthorne said that as many as 1,000 jobs could be cut before the end of this year. He said the company has looked at a number of benchmarks in comparison to other operators and has realised that Cable & Wireless is employing "far too many people" relative to the size of its business.
The job cuts are part of an extensive restructuring programme that will also see C&W drop its United States business, which lost more than STG255 million last year. Despite an investment in US operations that is thought to have run into billions of dollars, Cable & Wireless said it now realises there is no long-term viable business there for the company and it will withdraw from the region in the most cost-effective way possible.
For the full year to 31 March, C&W reported revenues down 24 percent to STG4.391 billion, lower than even the most pessimistic analyst estimates of STG4.5 billion. Its loss before tax and exceptional items ballooned from STG14 million last year to STG224 million in 2003, a result that CEO Francesco Caio frankly admitted was "unsatisfactory." Including exceptional items, the full-year loss was STG6.53 billion.
Lapthorne said that dividends would also be suspended for a year and that his priority is to create a stable financial base for the company, which he said could return to profitability by 2005.
Cable & Wireless, which claims to have the largest UK market share after BT, also has operations in territories including the Caribbean, Japan, mainland Europe and Panama, with more than 18,000 employees. From now on, regional CEOs will be responsible for the financial performance in their territory, and in its reporting the company will focus now on Profit Before Tax (PBT) instead of Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) to keep management's focus on the bottom line.
Cable & Wireless was down sharply in morning trading in London, falling 10 percent to STG86.50. © ENN