Cable & Wireless confirms 3,500 job cuts

Telecoms company Cable & Wireless today announced it is to cut around 3,500 jobs worldwide as part of a restructuring of its troubled Global division.

The overhaul will involve Global pulling out of some markets in the US and continental Europe and reshaping its UK operation.

Around half of the division's 12,500 strong workforce is based in the UK - in London, Birmingham, Warrington, Bracknell and Milton Keynes - but the company has not said where the jobs will be cut.

The chief executive, Graham Wallace, said it was likely to be "business as usual" in the UK with the majority of the job cuts in the US and continental Europe.

We took a pretty thorough look at all Global businesses and the option we have chosen is the best one for Global's future," he said.

The division, which provides data and internet services to corporate customers, has been hit by severe pricing pressures in the last 18 months.

The cuts were announced as the company unveiled interim results showing the full extent of the problems faced by its core Global division.

Underlying pre-tax losses were reported at £107m compared with profits of £83 million a year earlier.

It has also written down the value of its Global assets by £3.5bn and that led to bottom-line losses of £4.43bn compared with a figure in the red of £291m last year.

Global will now focus on large scale multinational customers in the US and continental Europe, after rejecting plans to pull out of those regions.

The restructuring is expected to cost Cable £800m over the next 12 months, although it will save the company £600m a year once completed.

Mr Wallace added he would remain in his job despite the latest job cuts and losses. "I've got a job to do here and I intend to complete it. We have by far the strongest balance sheet in the industry and we have the ability to see this restructuring through," he said.