C&W cuts 'less than expected'

Cable & Wireless said yesterday that more than 70 staff have left the group following its acquisition of Glasgow-based Thus, as it trimmed the number of redundancies it expects from the deal.

London-based C&W said in November that it expected 700 jobs to go from the combined workforce of Thus and its own next generation telecoms business.

But it announced in a trading statement yesterday that only 600 "colleagues" – including 74 who have left already - have been notified of redundancy, with the job losses coming over three years.

The company, which paid £329 million to buy Thus last year, refused to disclose how many of the job losses will come from within its most recent acquisition or how many of the positions lost will be from Scotland.

C&W still expects to save £82m a year from the combined group by the time the integration of Thus is completed – a process it expects to take three years. Yesterday C&W said it expects Thus to make earnings before interest, tax, depreciation and amortisation of £23m for the six months to 31 March, with savings for the period of £7m.

Much of the early savings and redundancies are likely to relate to the takeover and delisting of Thus, which no longer faces the cost of maintaining a listing on the London Stock Exchange or carry out functions such as investor relations.

Richard Lapthorne, chairman of C&W, said: "Our two businesses are performing very much in line with our expectations.

"We remain alert to the economic environment but we continue to trade strongly."

Following the acquisition of Thus – formerly part of Scottish Power until its stock market flotation in 1999 – C&W said it was going to turn the business into a subsidiary specialising in providing telecoms services to medium-sized businesses.

Source: The Scotsman, 11th February 2009

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