Over 10,000 British IT workers face losing their jobs as BT, NTL and NEC slash the size of their UK operations. In a grim series of announcements today BT said it would cull an additional 1,000 jobs to add to the 5,000 cuts only just announced. NTL said 5,000 staff faced redundancy and NEC added it would cut staff at its Scottish plant in Livingson, but refused to say how many would be affected.
The scale of BT's job cuts, made after the company reported a slide in operating profits, surprised industry experts who had predicted that around 4,000 staff were vulnerable.
BT Ignite will bear the brunt of the cuts with 1,500 jobs within the business service division being shed. The company said the redundancies were necessary to convince the City that it was serious about reducing its debt mountain and added its "restructure" would save £575m.
Like BT, cable firm NTL blamed the global downturn for its decision to axe 5,000 UK jobs by the end of 2003. The firm's managing director in the UK and Ireland, Stephen Carter, said that the company was currently overstaffed and needed to cut back and become leaner: "Today we employ 19,500 people, but the natural run rate of the business is probably 15,000."
NTL predicted that 2,500 jobs would be slashed next year with a further 2,500 targeted in 2003.
Carter dismissed speculation that the cable company's £11bn debt would drive it out of business before the market recovered. "We are reasonably confident with the debt position and expect underlying trading to improve," he said today.
NEC also blamed the international economy for its job cuts. The company's senior managing director Shigeo Matsumoto said NEC would cease DRAM production in the West Lothian factory which currently accounts of a fifth of the corporation's total DRAM output: "We will have to cut jobs there."
He added: "Prices for semiconductors will not turn around in the next quarter or beyond so we will continue to reduce production of DRAM everywhere other than in Hiroshima."
Analysts predict that the move to cease memory production will result in half the plant's 1,600 staff being laid off.
It was not just British IT jobs that are being axed as the economic slowdown continues to bite. In the US HP said today it would cut 6,000 staff after reporting a sales slump of 14 per cent. The company said slashing the jobs - on top of the 1,000 which it cut earlier in the year - would reduce annual operating costs by between two and four per cent.
Senior executives blamed a "dramatic deterioration" in IT spending globally. "Economies around the world continue to weaken as we move through the quarter," HP's chief executive Carly Fiorina said. "I don't think we can call when a recovery will occur."
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