No spoonful of sugar for Cable & Wireless staff

C&W's chairman lays it on the line - we don't want all our customers and we don't want all our staff. Blunt talking, or blunt instrument?

"Congratulations, we work for an underperforming business in a crappy industry and it's going to be hell for the next 12 months." As emails from the boss go, this one is a doozie. "As we reduce the number of customers we serve, fix some of our problems, strip out layers of management, we will need fewer people to run the business." John Pluthero, the new head of Cable and Wireless, certainly knows how to get the attention of his staff.

Such an approach is admirably frank, in a business more usually characterised by waffle and circumlocution. It is also dangerous. In saying that the company will abandon customers and staff, Pluthero is advertising C&W as an unreliable supplier and an uncertain employer. Other suppliers and other employers will be quick to use this to tempt the best away. Hardly a good start to the year of reconstruction.

While the memo also includes more positive themes — for those who like a wild ride, Pluthero says, this is the right place to be, and by the end C&W will be more Armani than Top Shop — it will be remembered for its dour analysis of the state of the telecommunications business and C&W's particularly dowdy condition therein. All true, but good leadership is about rather more than just telling the truth.

Pluthero is an experienced businessman. He can have been in no doubt that the memo would leak to the press, and will have no misconceptions concerning the demoralising effect to staff at reading about their demise in the Sunday papers. This is tough love indeed, unless the intention is to save on redundancy payments by provoking a wholesale exodus of all staff regardless of merit. In that case, a massively shrunken company consisting mostly of long-term contracts with large companies will result – barely more than a collection of assets in an easy to swallow format for an acquisitive competitor.

If Pluthero turns C&W around, it will indeed be one of the most astonishing reversals in recent times. We wish him luck. Yet it's all too easy to read the memo as part suicide note, part eBay listing. We take no pleasure in the thought of yet another big name in British technology being consigned to history, but the ghost of Marconi may soon have company in its Hertzian heaven.