PCCW lays off 340 employees

"The staff reduction (which follows a 12-month company moratorium on layoffs) is confined to the Internet Services area," the Hong Kong-based company said in a statement today. CyberWorks is believed to employ about 15,000 staff worldwide.

According to the statement, affected employees have been given advanced notice, and will be put on paid leave until their employment is terminated on August 20.

The move comes amid talk that CyberWorks would scale back investments in its online businesses, including lifestyle portal Netvigator.com, pan-Asian multimedia channel Network of the World (NOW), and an interactive TV unit (iTV).

Indeed, the high costs of Internet expansion and write-downs in its online investments have been blamed for CyberWorks' full-year loss of US$886 million (or US$1.9 billion in US accounting terms).

And with US$5 billion in debts, CyberWorks chairman Richard Li is under even greater pressure to cut costs.

Not surprisingly, the yet-to-be-announced Internet Services Strategy has been described by the company as one that would support its "core business strategy to maintain margins and grow EBITDA (earnings before interest, tax and amortization), while maintaining a financially disciplined...approach to creating shareholder value".

Some media reports speculate that NOW will be scaled-down and integrated with Netvigator. Others cite unnamed sources who say there are plans to eventually phase in cuts of up to 4,000, with most of these cuts in Netvigator, NOW and iTV.

Separately, CyberWorks said it has joined with Intel and IBM to create an integrated hardware, software and broadband connectivity package for the Hong Kong market. Among others, the package, which starts from HK$820 a month, includes a special rebate on CyberWorks' Netvigator 1.5M Ultraline broadband service and offers popular gaming software.