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Wednesday, 5 December, 2001, 07:43 GMT
PCCW adds to HK job cuts
Richard Li, PCCW executive chairman
Chairman Richard Li had to ditch a bond issue in July
Hong Kong's high-profile communications group, Pacific Century CyberWorks, is cutting more than 500 jobs and freezing wages and new hires to try to ride out the economic downturn.

The company, said its chairman Richard Li, is hoping to save HK$190m ($24.4m; 17m) a year as a "direct result of the extremely difficult economic situation in Hong Kong and globally".

PCCW bought Hong Kong's incumbent telecoms company, HKT, from Cable & Wireless in August 2000, but has suffered since as the telecoms market was deregulated ahead of schedule.

At the time, it promised to avoid cutting jobs for 12 months.

Pain to come

C&W HKT offices
PCCW ran up debt when it swallowed C&W HKT
As a result, PCCW has been slow to join the rush among Hong Kong corporations to slim down the payroll.

To date, its only sackings have been 340 people removed from its consumer internet operations in July as the dot.com craze waned.

But now it looks likely that the 506 job losses announced today could be just the start.

"It is not possible to give assurances that there will be no further redundancies," Mr Li said in a letter to the company's 14,000 employees.

Unemployment among Hong Kong's 6m population rose to 5.5% between August and October, an 18-month high, with most redundancies in the financial services industry.

Boom to bust

Mr Li is one of Hong Kong's most high-profile executives.

Son of property-to-telecoms tycoon Li Kashing, PCCW was his vehicle for breaking into the big league in the midst of the technology boom of the late 90s.

The company's meteoric rise was capped by the purchase of HKT.

But the slide in tech valuations since last year means that PCCW is the worst performing blue-chip in Hong Kong's Hang Seng index, having slumped 56% in the year so far.

See also:

23 Nov 01 | Business
Hong Kong prices keep falling
21 Aug 01 | Business
Hong Kong warns on economy
23 Jul 01 | Business
Giant HK bond issue scrapped
09 Jul 01 | Business
Giant bond issue launched in HK
28 Mar 01 | Business
Hong Kong tycoon drops results bomb
22 Mar 01 | Asia-Pacific
Net tycoon never got Stanford degree
29 Feb 00 | Asia-Pacific
Asian telecoms giant takes shape
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