Cable & Wireless plans to cut staff, customers

Cable & Wireless plans to cut staff, customers

	Published : Wed, 01 Mar 2006 11:45 By : Amy Watts Print this Story

LONDON: Britain's telecoms company Cable & Wireless Plc. is reducing its staff strength to 3,000 jobs over the next five years while its customer base will be slashed by as much as 90 per cent to 3,000 as part of a restructuring programme the company is planning to undertake.

The telco, in existence since 1860 and offering fixed and mobile voice, data, IP and broadband services to business and residential customers and services to other telecoms companies, has been severely affected by competition and falling prices and it had unveiled plans to split into two business units even as it issued a profit warning for 2006-2007 in January this year.

It said Tuesday by concentrating on "fewer, larger customers and reducing complexity in its products, systems and processes, it can set new standards for customers' service experience while, at the same time, reducing costs".

Executive director of the company John Pluthero said 89 per cent of the company's customers just generate 4 per cent of revenue and around 2 per cent of its gross margins. He said he is confident the company can achieve its revenue goal of 2 billion pounds.

The company has taken up restructuring over the past two years after shelving a 9-billion-pound plan to operate globally offering its services to large businesses. It has acquired British fixed line company Energis for 674 million pounds, which it expects will bring in cost savings of more than 40 million pounds by end of March this year.

Britain's second largest supplier of corporate fixed-line telecommunications services after BT, C&W has been seeing steady fall of revenues from voice services and the purchase of Energis has been an attempt to bolster the business. The company is now adopting a strategy to increase its revenues from broadband services to cover the declining voice revenues.

C&W shares were down 1.2 per cent to 107.25 pence on the London Stock Exchange.