By Andy McCue, 6 May 2005 12:45
NEWS Marconi is to cut 800 jobs in the UK after failing to land any of the contracts for the £10bn upgrade of BT's infrastructure last month.
BT will replace its circuit-switched networks with a single IP-based network as part of the 21st Century Network project and Marconi's share price initially plummeted 40 per cent after being left off BT's preferred supplier list.
Marconi warned at the time that it would have to cut costs and jobs as a result of failing to get the business and even pleaded with the government to intervene.
Now - on a morning dominated by blanket General Election news coverage - Marconi has announced a restructuring that will lead to the loss of 800 UK jobs.
Consultation with trade union representatives on the job cuts has already begun and Marconi said it is also investigating other cost reduction initiatives "with immediate effect".
A restructure of business units will also see Marconi focus its four key product groups in four regional centres around the globe.
Mike Parton, CEO of Marconi, said in a statement: "The new leaner organisation that we have announced today allows us to maintain our product roadmaps, focusing our research and development expenditure on our key product lines whilst making significant cost savings mainly in overhead areas to underpin profitability."
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1. anonymous
Why is it that UK companies refuse to support indigenous UK companies?
Marconi - a major employer, and a major player in the telecomms market for decades now has to brave the fierce waters of competition with the knowledge that it can no longer enjoy the support of one of its major customers.
Perhaps BT view Marconi as a threat and have therefore sought this as an opportunity to remove it.
I know the Government would view this situation purely on the grounds of a commercial decision made by a company that has a legitimate right to make its own value judgements. And so it has; but this "judgement" is creating unemployment - particularly in a sector where significant wealth can be generated for the UK economy. Is that paradoxical? But what about the new Government initiative of social responsibility, of (as the Conservatives once put it) going back to basic principles on social behaviour - engendering a society of social responsibility and respect. Could any of this translate in the commercial world of (almost) open warfare between UK companies, and create a more consilliatory approach towards the social responsibility of UK companies?
Should the Government accept its responsibility of protecting its own economy and support the indigenous suppliers of goods and services? Is this not especially important where major employers are involved, and the livelihoods of hundreds of people are at stake?
Competition will flesh out the uncompetitive and determine only the "fittest" survive. But I wonder if other european governments share the same view?