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'Cost reduction initiative'

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Marconi is to rid itself of 800 workers in the UK following its failure to win a slice of a major £10bn contract from BT.

The job losses were widely expected after BT rejected Marconi's bid to become a preferred supplier for its new, gee-whiz 21st Century Network (21CN). Although BT said Marconi's telecoms gear was up to scratch, the UK's dominant fixed-line telco said the price just wasn't competitive.

However, the job losses are fewer than the 2000 cuts unions had feared the company would make if it lost the BT deal. As a result of today's announcement 450 jobs are being lost in Coventry, with a further 300 in Liverpool.

The restructure will give Marconi room to "dismantle much of the current UK-based central operations organisation leading to significant cost savings", it claimed. The company is also looking at introducing other "overhead cost reduction initiatives" across the whole business in a bid to save money.

Full details of the makeover and how much it will cost will be published on 17 May when Marconi publishes its preliminary figures for the fiscal year to the end of March.

In a statement, Marconi chief executive Mike Parton said: "We are committed to maintaining and improving the products and services we provide to our customers.

"The new leaner organisation that we have announced today allows us to maintain our product roadmaps, focusing our R&D expenditure on our key product lines whilst making significant cost savings mainly in overhead areas to underpin profitability."

Earlier this week, union bosses said they were "disappointed" following a meeting with Marconi execs to discuss potential layoffs. ®

Related stories

Unions hold powwow with Marconi over job fears
Marconi mulls bleak future following BT bombshell
Job fears haunt Marconi
Marconi savaged after failure to win BT 21CN deal

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