Shares in telecoms-equipment maker Marconi have crashed after the firm warned that European sales had slumped dramatically in the last seven weeks and 1500 UK jobs will be axed.
Some 4000 staff will go worldwide, with 1500 job losses in the UK, including the closure of the firm's plant in Poole, Dorset.
All but 80 of the site's 570 staff will lose their jobs, with the remainder being offered positions at other sites.
Shares in the company had been suspended all day Wednesday, outraging investors, as Marconi's board met to agree the wording of their profit warning.
But the firm's report that sales have fallen 15 per cent and that operating profit will fall by 50 per cent, has shocked the market.
As recently as 17 May, Marconi issued well-received results and said that its greater exposure to the European market would help insulate it from the worst effects of the overall downturn in spending on telecoms equipment. It also said that revenues would rise.
Seven weeks later, the company is singing a different tune.
Lord Simpson, chief executive at Marconi, said in a conference call: "The biggest difference has been a significant fall-off in orders in Europe... Customers in Europe have really turned off the tap in capital expenditure."
Marconi, which employs 55,000 staff worldwide including 20,000 in the UK, said in April that it would shed 1500 UK jobs as it unveiled 3000 staff cuts.
Another 3000 workers and 1000 management positions are now to be axed.
At the time unions were angry, believing the company was cutting costs unnecessarily at a time when it was doing well. They have again insisted they will not accept compulsory redundancies and called for Marconi to ride out the slowdown.
Danny Carrigan, national secretary of the AEEU engineering union, said: "We have confidence that this sector of manufacturing will return and we believe the company should stay in it."
Shares in the firm had fallen 53 per cent to 114.25 by 1400hrs BST Thursday.
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