1,500 jobs cut at Cable & Wireless

CABLE & WIRELESS Communications, the cable television and telephone operator, yesterday confirmed that it is axing 1,500 jobs - more than a tenth of its workforce - as part of a cost-cutting drive. The bulk of the redundancies will be among backroom and support staff, who account for a third of the 12,000-strong workforce. Compulsory redundancies have not been ruled out.

All CWC's employees were briefed on the cutbacks in meetings up and down the country yesterday. But details of exactly where the axe will fall will not emerge until the company reports its annual results in May.

The rationalisation programme is the result of an "optimum resourcing review" ordered by Graham Wallace, CWC's chief executive. He said the review, carried out by Coopers & Lybrand, had identified "significant operational efficiencies which will result in reduced unit costs". But the company declined to spell out how much the redundancy programme would cost or the level of savings it would yield.

CWC was formed last year from the four-way merger of Mercury, Nynex CableComms, Bell Cablemedia and Videotron. Since then it has cut 400 management jobs, condensed 10 call centres into three, merged its five network control centres on to two sites and imposed a recruitment freeze. But the Coopers review identified further substantial costs savings.

"Clearly there are areas where there is fat; we simply don't need to same number of people to perform all the functions," said a spokesman.

As part of the restructuring, increased resources will be put into growth areas of the business such as data communications and the business market generally. At present, data communications make up about 10 per cent of telecoms traffic but CWC believes this could grow to 50 per cent within five years.

Administration, finance, personnel and other support functions will bear the brunt of the cuts. The 1,500 redundancies represents a net figure. Since CWC is hiring 700 staff for a call centre in Glasgow, the level of job losses from the existing workforce will be more than 2,000. Mr Wallace said the review would also lead to improved service and confirmed CWC was sticking with plans to invest pounds 1bn this year.

Since Mr Wallace's arrival CWC has embarked on a pounds 400m upgrade of its long-distance fibre network. The investment is additional to the money being spent each year to build out the cable network.

It has also unveiled plans for entering the digital market through a programming link-up with BSkyB and a software deal with Netscape and Oracle to give customers high-speed access to the Internet.