Marconi to axe 1,500 UK jobs

Communications giant Marconi - the former GEC - has announced plans to axe 3,000 jobs worldwide over the next year, half of them in the UK.

The job losses are part of a significant restructuring, which will see the company reorganise its business into three divisions.

But the company also announced that it planned to create 3,000 "highly skilled, high technology jobs" at UK sites in Ansty, near Coventry, Nottingham and Northampton.

And it was keen to emphasise that the primary reason for the job cuts was a reflection of changing skill requirements.

Although, not surprisingly, the company, which does 40% of its business in the States, has been affected by the US slowdown.

"While today's announcement contains some regrettable news, Marconi plans to be a net creator of jobs in the UK over the next 24 months," said John Mayo, Marconi's deputy chief executive.

"Our requirement for certain jobs has reduced. However we will also be recruiting, reflecting our changing skill requirements," he added.

The shake-up would result in a one-off cost of £400m, with cost savings of £200m a year, the company said.

Unions expect factories in Liverpool and Coventry to bear the brunt of the job losses in the UK.

The move follows last month's announcements by telecoms giants Motorola and Cable and Wireless to cut 11,000 jobs worldwide, including up to 2,700 in the UK.

Lucent Technologies, Marconi's American rival, also recently announced that it was cutting 10,000 jobs, a tenth of the total.

Worldwide operation

Marconi employs about half of its global workforce of 55,000 in the UK.

The company has operations across Europe, the US, Asia and Australia.

Following the £7bn sale of its defence business to BAE Systems in 1999, Marconi has reinvented itself as a high-tech firm with increased emphasis on telecommunications in the United States.

Its full-year results to the end of March are thought to be in line with City estimates of £710m.

But there has been mounting pressure for Marconi to reassure investors over its current performance.

Its share price has dived from a high of 800p this year, to 331p in late trade on Tuesday amid concern about the impact the slowing US economy may be having on its business.

More than 40% of Marconi's sales are generated in the US.

Profit warnings

Investors' fears have been raised by a series of profit warnings from telecoms equipment manufacturers in recent weeks.

Marconi's share price plummeted last month when US networking equipment firm Cisco announced a raft of job cuts.

It fell even further when Nortel of Canada lowered its first quarter estimates.

Last week, French rival Alcatel said it would cut 1,100 jobs in the US, while Lucent and Ericsson have also been affected by the slowdown.