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Marconi mulls bleak future following BT bombshell

Jobs threat loom

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Thousands of jobs at Marconi look set to be chopped as the company restructures its operation following the devastating news last week that it had failed to win a chunk of a massive £10bn contract from BT.

The company is also setting out its stall for the possible sale of the telecoms equipment business as it comes to terms with failing to win such an important contract.

In a statement to the Stock Exchange this morning Marconi said that it "clearly recognised the need to refocus its business in the light of BT's decision and recent trends in the global telecoms equipment market".

It went on: "The Board will continue therefore to pursue all strategic options with the objective of maximising shareholder value."

And on the issue of jobs, Marconi said that "management is reviewing the resource and headcount in each of its activities, particularly in the UK, and will announce shortly the result of this review together with the associated cost savings and level of headcount reduction".

Marconi's uncertain future follows its failure last week to secure a piece of BT's 21st Century Network, a £10bn network upgrade. Marconi's share price share price bombed 40 per cent on the news. The company had been tipped to win a chunk of business from BT when it announced its preferred suppliers for its ambitious 21st Century Network (21CN) project.

According to BT, Marconi's gear was up to scratch, but it was uncompetitive on price.

Despite BT's stand that it was "just business", the former monopoly's decision not to name a single British company to supply the gear for its new digital network drew a stark warning from trade union leader Peter Skyte of Amicus.

He said that the announcement by BT "will seriously damage the UK's hi tech skills base and could potentially result in Marconi cutting up to three-quarters of their 4,300 staff and its ability to continue as a free-standing company.

"No other advanced country would allow such a strategic investment decision affecting its national infrastructure to be contracted to foreign-owned suppliers," he said. ®

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Friday 29th April 2005 10:31 GMT

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