Cable & Wireless and Nortel lay off staff

More job losses are looming in the telecoms sector

The worsening economy has again hit the telecoms sector this week, with both Cable & Wireless (C&W) and Nortel Networks announcing large-scale redundancies.

C&W will make 600 job cuts following the integration of Thus Group, which the company acquired in October 2008. The UK provider said in a financial statement for 2008/09 (PDF) that it hopes the purchase will realise savings of £7m by 31 March.

Richard Lapthorne, C&W chairman and chief executive, said that he is confident the company is now in a strong position. "We remain alert to the economic environment, but we continue to trade strongly," he added.

Meanwhile, Canadian supplier Nortel is to embark on a "detailed plan to reduce its global workforce", although the exact number of layoffs are unknown.

The company, which entered administration in mid-January, is to review its real estate and IT licences, along with all supplier and customer contracts.

"Nortel has commenced several initiatives to generate cost reductions to decrease the company's cash burn," read page 22 of Docket 248, a court document filed on 9 January by the firm's advisor, Ernst & Young.

"Although a comprehensive restructuring plan is still at a preliminary stage, Nortel believes these initiatives are essential to reducing costs and preserving existing cash resources."

Nortel has also asked to have relief from its annual shareholder meeting this year, pointing out that it will be too costly and distractive for staff who should be focusing on stabilising the business for shareholder benefit.

In related news, technology consulting firm Forrester Research has announced that it will reduce its headcount by five per cent across the business.

Forrester said that the cuts, which amount to 50 jobs, are designed to make the company stronger in the current economic climate. The announcement comes ahead of the release of its 2008 full-year financial results on 11 February.

"We have made this difficult decision in response to challenging global economic conditions," said Forrester chairman and chief executive George Colony.