Cable & Wireless cuts go deeper
Published: 05 Jun 2003 09:57 BST
Cable & Wireless is to sack 1,500 staff, take a £6.5bn hit on its accounts and has joined the long line of companies beating a retreat from the US market.
There is also, of course, a board reshuffle, restructuring and a new face to run the UK operations. Royston Hoggarth has been head-hunted from LogicaCMG, where he was chief executive international, to become chief executive in the UK.
A nail in the coffin of its plans to compete worldwide is the abolition of the company's Global and Regional teams. Robert Lerwill, head of the company's profitable Caribbean Region, is off the board with immediate effect -- but he'll "provide assistance for a short term".
His departure completes the board overhaul demanded by disgruntled shareholders and delivered by the new chairman, Richard Lapthorne, who joined the company in January
The group's actual operating losses were £244m.The £6.5bn is an admission of failure and a write-off related to Cable & Wireless' grand spending spree, when the company was a late entrant to the internet boom years.
The company will be having what is, in effect, a fire sale of its US assets, following a restructuring of its property leases there.
Francesco Caio, chief executive of C&W, said that the company's UK operations, while "second only to BT", are unsatisfactory. He and the new chairman will be taking the usual steps to drive greater efficiency and focus.
In Europe, the group will divest itself of all activities with the exception of providing services to other telecom operators. The Japan and South East Asia arm is profitable and will probably be left alone.
Last year, the company axed 3,500 from its international operations.
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