Red ink drives C&W to cut 3,000 jobs

Red ink drives C&W to cut 3,000 jobs

When Cable and Wireless (C&W) releases its half-year results on Wednesday, the London company will announce plans to cut 3,000 jobs due to substantial losses and take a £1 billion ($A2.8 billion) restructuring charge, The Guardian newspaper has reported.

"We announced in September a major operational review of Global, the details of which will be released on Wednesday. In terms of numbers, anything in the press at the moment is speculation and we don't comment on speculation," said C&W spokesman Peter Eustace.

C&W warned in September that it expects revenue to drop by 6 per cent for the six-month period to September 30 in its global division, which is called C&W Global (excluding network capacity sales), against a previous forecast of zero to 10 per cent growth.

C&W employs about 12,000 people in Europe, the US and Asia in its C&W Global business, which focuses on data communications and Internet services, Eustace said.

The majority of the layoffs in C&W Global, which has already experienced 4,000 job cuts this year, are expected to come from the company's US offices. C&W cut more than 8,000 jobs between December 2000 and May of this year, according to its report for its last fiscal year.

Media speculation is rife that the US offices of C&W Global, which provides Web site hosting and telecommunication services for corporations, could be eliminated altogether, but embattled CEO Graham Wallace is expected to pledge on Wednesday that the division will be kept operational, the report said.

Though C&W Global is estimated to be costing C&W about £800 million a year ($2.3 billion), Wallace is set to promise the division will begin generating money by the end of the next fiscal year or he will step down from his post, the report said.

On Friday, Verizon Communications said that it is selling off its 5.4 per cent stake in C&W due to continued losses from its investment. Verizon's disposal of its C&W shares, worth an estimated $497 million, is expected to be completed sometime this week, a Verizon spokesman said.

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