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Tuesday, 15 January, 2002, 17:11 GMT
Marconi may cut 4,000 more jobs
Marconi graphic
Ailing telecoms equipment firm Marconi has earmarked a further 4,000 jobs for cutting in a fresh effort to restore profitability.

The firm, which is already progressing plans which will slim its workforce by 17,000, has launched a review aimed at cutting costs by a further 200m.

"The group anticipates that this review could lead to an additional reduction of around 4,000 employees," Marconi said on Tuesday.

About 1,000 jobs are under threat in the UK with the rest hitting the company's international operations.

Marconi also said its debts have been slashed from last year's peak of 4.3bn to 3.5bn currently.

The debts should fall further to 2.9bn once an ongoing program of sales of non-core assets is complete, the company said.

Shrinking workforce

Marconi has axed 8,000 of 49,000 posts since September, with a further 9,000 shed through the sale of non-core businesses.

I think we have stabilised the business. I am certain we are going to make it

Mike Parton, Marconi chief executive

The latest package would leave Marconi's UK operations employing about 7-8,000 staff, down from 12,000 in April last year.

Unions said they were working hard to avoid compulsory redundancies.

"Marconi is struggling against terrible market forces, " said Roger Lyons, general secretary of Amicus.

"Both the company and the union are determined to see what is the jewel of Britain's telecommunications crown through this crisis."

"We will deal with this together and will do all we can to avoid compulsory lay-offs."

Further losses

The jobs warning was released as Marconi revealed an operating loss of 130m over the past three months, with sales in core operations at 706m, more than one third lower than a year before.

Marconi's chief executive Mike Parton said he was sure the company would pull-through.

"There are fewer questions now about whether we are going to survive," he told reporters.

"I think we have stabilised the business. I am certain we are going to make it."

But he warned that trading would remain tough over the next 12 months.

"We believe we will have at least a year before the market improves. I think we have got a full year at these trading levels," he said.

City reaction

But City traders were unimpressed, marking Marconi's share price down.

"The debt has come in larger than we expected. The net debt was 3.5bn and we were looking for 3.2bn," one dealer said.

Marconi shares plunged 6.75p, or 17%, to 32p in early trade before recovering to close down 4p, or 10%, at 34.75p

The BBC's Tim Fawcett
"One of Marconi's big problems has been that is has run up massive debts"
The BBC's Pauline McCole
"Marconi's troubles go from bad to worse"
MSF union's general secretary Roger Lyons
"We are confident Marconi will have a future"
See also:

21 Dec 01 | Business
Marconi hopes to hit debt target
17 Dec 01 | Business
Marconi sells optics business
13 Nov 01 | Business
Marconi losses reach 5.1bn
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