By Andy McCue, 28 February 2006 12:15
NEWS
Cable & Wireless is to cut its UK headcount by half over the next four to five years as part of a massive cost-cutting programme.
The company said it is aiming to cut its operating cost run-rate by £5m per month by the end of September 2006.
The official announcement follows a leaked memo from C&W UK chairman John Pluthero to staff, which warned "this is no longer a place for the timid" and said those worried about the changes should "step off the bus".
The memo said: "Congratulations, we work for an underperforming business in a crappy industry and it's going to be hell for the next 12 months."
Now C&W has revealed the full extent of those job losses and said the current 5,500 UK headcount of C&W and Energis employees will be cut to "between 2,500 and 3,000" over the next four to five years.
The cuts will kick in almost immediately, with a net headcount reduction of more than 350 in the second half of financial year 2005/06.
A company statement said: "C&W expects that, 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."
The company also said it expects more than £40m per year cost savings on the £674m merger with Energis by the end of March 2006.
C&W will outline the full plans for the UK business at a meeting of analysts and investors later today.
Comments
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1. John Pepper
"Mad as a March Hare"
The news just gets brighter for networking VARs concentrating their efforts on addressing the mid and enterprise markets within the UK. And, the arrogance of certain big names in the industry is helping our cause.
We hadn't even reached March before the mad hares were out of their blocks and running across the business news sections of every newspaper stand. Announcements, like those from Cable & Wireless on February 28th, will do nothing to help the reputation of our industry. Are we so arrogant that we can simply "drop" 27,000 customers without the slightest thought for their needs?
The Mad march hare has truly made his mark this year!
Of course, it is fantastic news for the new "super VAR", the passionate and hard working VAR that wants to build true working partnerships with its customers. However, it is deeply embarrassing for the staff of one of the biggest telecoms companies who will have to tell many end users that they are no longer eligible for their "guest list" and will be excluded from the party.
Arrogance is a costly trait and the tides are already turning. As more announcements like this hit the presses it is only a matter of time before a new wave of trend setting, eager VARs appear on the scene to replace these moaning giants.
John Pepper
Managing Director
MINX Technology
2. Paul Adams
Having worked for, what was then, Mercury Communications for 6 years in the late 80's and early 90's, what has happened to this company is a crying shame. It was a great company then, with loyal and enthusiastic staff, and now they would be much better served by trying to regain the earlier culture that Mercury had, rather than following this idiotic strategy. Energis was hardly a well run company, and this looks like the failed Energis ethos to me. I still have friends at C&W, and I really fear for them ...