C&W Announces Job Cuts, U.S. Exit Plans

• By The WHIR, June 04, 2003

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June 4, 2003 -- (WEB HOST INDUSTRY REVIEW) -- Cable & Wireless (cw.com) ended weeks of speculation today as it announced its intentions to completely exit the U.S. market and cut 1,500 jobs after revealing its year-end earnings report that saw the company post a £6.5 billion loss.

Cable & Wireless broke into the Web hosting and telecommunications market in the U.S through an aggressive acquisition strategy. However, both segments of the U.S. operations have continued to incur heavy losses on the company and it has been rumored for weeks that newly appointed CEO Francesco Caio would make official the company?s intentions to dump the loss-making divisions.

Caio said that in light of the restructuring rampant in the Web hosting industry, ?we don?t believe we could ever get to a position of adequate return on our investment.? As a result, ?we are out of that business.?

The company is expected to face difficulties finding buyers for its U.S. interests. There are currently no definitive plans in place, but Caio said it is considering all options to divest itself of its U.S. operations.

While no time frame has been set, ?there is a desire to implement it as quickly as possible,? said Caio.

The jobs cuts are expected to lead to a reduction of approximately 1,500 jobs over an 18-24 month period.

Tags:  telecommunications  Appro  Cable & Wireless 

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