C&W 'to wield axe in Europe'

Chief executive Wallace is cutting jobs across the globe

The UK telecoms firm Cable & Wireless is planning to cut 800 jobs, or about 65% of its workforce in Europe, a report has said.

The cuts would come as the company's struggle to stem its losses continues, the news agency Associated Press reported, quoting a an internal memo obtained by Dow Jones Newswires.

The memo was reportedly sent late last month by C&W's Ottmar Schipper, vice president for Germany and Austria.

In it, he reportedly chose to give the news a positive spin, insisting that the company was to "keep nearly 50% of the overall work force"

Premature

C&W's London spokesman, Peter Eustace, said any job cuts in Europe had not yet been decided.

"The consultation process is still going on," he said.

Last monthly, the company's chief executive warned that 3,500 jobs would be lost globally.

The cuts should help C&W to generate cash by March 2004, he said at the time.

C&W suffered a £4.5bn loss during the six months to September, up sharply from a £567m loss a year earlier.

Sliding stock

Earlier on Tuesday, a leading shareholder group asked the City regulator to investigate whether C&W broke stock market rules by failing to reveal a possible £1.5bn tax bill.

C&W has lost nearly half its market value since Monday, when it revealed that a downgrade in its credit rating had obliged it to set aside £1.5bn to cover a possible tax bill arising from the partial sale of its mobile phone group One2One to Deutsche Telekom.

The latest slide in C&W stock has cost the company its place in the prestigious FTSE 100 index of leading shares.

Cable & Wireless shares closed up 1% or 0.25p at 44.75p ahead of the latest news.