C&W announces massive UK staff cull

2,500 to 3,000 jobs are to be cut over next four to five years, which amounts to half the telco's UK workforce

Cable & Wireless (C&W) is to cut its UK headcount by half over the next four to five years as part of a massive cost-cutting programme.

The company said it is aiming to cut its operating cost run-rate by £5m per month by the end of September 2006.

The official announcement follows a leaked memo from C&W UK chairman John Pluthero to staff, which warned "this is no longer a place for the timid" and said those worried about the changes should "step off the bus".

The memo said: "Congratulations, we work for an underperforming business in a crappy industry and it's going to be hell for the next 12 months."

Now C&W has revealed the full extent of those job losses and said the current 5,500 UK headcount of C&W and Energis employees will be cut to "between 2,500 and 3,000" over the next four to five years.

The cuts will kick in almost immediately, with a net headcount reduction of more than 350 in the second half of the 2005/06 financial year.

A company statement said: "C&W expects that, by concentrating on fewer, larger customers and reducing complexity in its products, systems and processes, it can set new standards for customers' service experience while, at the same time, reducing costs."

The company also said it expects more than £40m per year cost savings on the £674m merger with Energis by the end of March 2006.

C&W will outline the full plans for the UK business at a meeting of analysts and investors later today.