Marconi to axe 800 UK jobs in business overhaul

Britain's Marconi Corp. Plc is planning to axe 800 jobs in the UK as the telecoms equipment maker looks to recover from a contract loss that hammered its shares and raised question marks about its future.

While the job cuts had been widely expected after Marconi's biggest customer BT Group Plc cut it out of a £10-billion network upgrade contract last week, the figure was less than some feared.

Up to 2,000 jobs, mainly those related to BT, were thought to have been at risk at the company, which employs about 10,000 people worldwide, including around 4,300 in the UK.

A spokesman said some 450 jobs would go at the company's facility in Coventry in central England, with another 350 set to go in Liverpool in the country's northwest.

Analysts said Marconi's announcement seemed to be more of an "interim measure" before its results announcement on May 17.

"I think they felt they had to demonstrate to the market that they were doing something. Given the massive risk and uncertainty surrounding their position on BT, I see no reason to buy the stock," said one analyst, who asked not to be named.

Marconi's shares were 0.2 per cent up at 280 pence by 0740 GMT, giving the company a market value of around £583 million. The stock has fallen some 42 per cent since the company announced its devastating contract loss last week.

The successor to the once-mighty GEC industrial empire also announced a reorganisation as part of a keenly awaited restructuring aimed at lowering its cost base and to help it compete better following the shock loss of the BT contract.

The company said its regional business organisations, and not its UK office, would now be responsible for its various products groupings, as it seeks to create "geographic centres of excellence".

As part of this move, the responsibility for its softswitch product that sits at the core of new generation networks would rest with northern Europe, while wireless networks would be central Europe.

Southern Europe will be in charge of Marconi's optical and access networks products, with North America overseeing its data networks business.

"Combining the product organisations with the regional businesses will enable the company to dismantle much of the current UK-based central operations organisation leading to significant cost savings," Marconi said.

Marconi, which laid off thousands of employees and shed assets to recover from near-collapse in the 2001 telecoms downturn, said it was looking to cut more costs across its other business functions.