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The BBC's John Moylan
"Seven hundred jobs are going at Motorola's factory in Swindon"
 real 56k

Video
Per Lindberg, Dresdner Kleinwort Wasserstein
 real 56k

The BBC's Andrew Walker
"Motorola has been cutting its workforce for some time"
 real 28k

Tuesday, 13 March, 2001, 17:39 GMT
Thousands of telecoms jobs to go
Cable & Wireless chief executive Graham Wallace
C&W's Graham Wallace says costs have to be cut
Telecoms giants Motorola and Cable & Wireless are to cut a total of 11,000 jobs across the world, including up to 2,700 in the UK.

Mobile phone maker Motorola will slash 7,000 positions, including up to 700 at its Swindon operation in the South of England.

Global telecoms firm Cable & Wireless is to axe 4,000 staff across the world, including about 2,000 from its UK workforce.

Motorola telephone
Cost cutting in the handset business is behind job losses at Motorola

The news caused Cable & Wireless's share price to drop by more than 20% on Tuesday in London. It held the top spot on the FTSE 100 fallers list, dropping by 138p to close at 545p.

Both Motorola and Cable & Wireless said the cuts were needed because of the economic slowdown in the US.

The German electronics group Siemens also contributed to the stream of bad news by issuing a profits warning.

The company said it would not meet its targets for this year, blaming "some uncertainties" at its semiconductor unit Infineon.

Not to be excluded, the French company Alcatel has announced that it would temporarily stop making mobile phones.

Job cuts

The job cuts are the latest in a huge wave of redundancies in telecoms, internet and computer related firms in the US, Europe and Asia.

All have been hit by a decline in orders from businesses pulling in their spending as the US slowdown bites.

Last week Cisco Systems said it would cut up to 11% of its full-time workforce, while Intel cut about 4% of its jobs after issuing a second profits warning.

Meanwhile, Sweden's Ericsson has warned that it faces a heavy loss in the first quarter of this year because of the US slowdown.

The industry has been hit by a slide in the growth of consumer spending on tech items such as computers and mobile phones.

Cutting costs

Cable & Wireless chief executive Graham Wallace said the company needed to "reduce costs aggressively".

The company's sales have grown in the UK and continental Europe, but have fallen in the US.

Overall sales for C&W Global, which include all of those regions and Japan, is expected to be 12% higher than the year before.

Motorola's Mike Zafirovski said: "We must continue to adapt our overall cost structure, workforce and production levels to a more competitive business model."

Motorola had already reduced its workforce by 5,000 since December, with the latest job cuts bringing the total to 12,000.

Swindon hit

Motorola's UK factory in Swindon is likely to be hit by the cut-backs, with up to 700 jobs expected to go.

That is about a quarter of all the staff employed by Motorola in Swindon.

Most of the Motorola job losses will come in its mobile phone handset factories, although its semiconductor businesses will also be hit.

In a company statement, Siemens added: "As is well known, prospects in the semiconductor industry have changed significantly in recent months".

In the last business year, Infineon accounted for about one-third of the group's pre-tax profits of 5.17bn euros.

Infineon itself has not issued a detailed forecast for the year, but it said it expected prices for its computer chips to decline.

Shares in Siemens slumped as much as 5% after the news, before recovering slightly.

C&W's shares dropped 20% to close at a two-and-a-half-year low of 545p.

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See also:

23 Feb 01 | Business
Motorola profit warning
15 Nov 00 | Business
C&W profits from internet move
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Motorola warns on profits
16 Feb 01 | Business
Tech giants wield axe
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Motorola scales back
10 Jan 01 | Business
Motorola profits tumble
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Silicon Valley giant cuts jobs
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Intel cuts 5,000 jobs
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Ericsson rings the alarm
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