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Marconi may cut 4,000 jobs
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January 15, 2002: 3:51 a.m. ET
Loss-making UK telecom equipment maker may slash more jobs, operators send less
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LONDON (CNN) - Marconi, the loss-making British telecom equipment maker, said on Monday it may cut another 4,000 jobs as telecom operators slash spending.
Its latest round of jobs cuts would come as telecom operators, like its biggest customer BT Group, slash spending to counter a global economic slowdown and $100 billion spending spree on high-speed mobile phone licenses.
Marconi said it wants to save another £200 million to return to profitability. The company said it made an operating loss of £130 million in the third quarter. It made loss of £5.1 billion in the six months to September 30.
The company also said in a trading update that third-quarter revenue from its phone equipment business fell 37 percent to £706 million from £1.12 billion in the same three-month period to December 31 a year ago.
"Market conditions remain difficult with continued uncertainty regarding levels and timing of service provider spending," Marconi said in a statement.
Marconi has already announced plans to shed 9,000 jobs and sell businesses to pay off its debt. At the end of December, its debt fell to £3.5 billion from £4.3 billion as of September 30, 2001.
Marconi said its debt, taking into account all the disposals announced in the last three months, would be £2.9 billion. That is within its end-March target range of £2.7 billion to £3.2 billion.
Its stock, which has tumbled more than 94 percent as it struggles to slash its debt, plunged 8.4 percent to 35.9 pence in early London trading.
"There's nothing in this statement that we didn't already know," Mark Tinker, analysts at Commerzbank, told CNN. "Telecom operators have not been spending and six months ago we thought Marconi would go bust. Its priority is to cut debt."
Marconi ousted its chairman and chief executive in September after Marconi was forced in July to cut its sales targets, which it had stubbornly stuck to even as rivals were reigning in costs and earnings targets.
Like its rivals, Marconi has been forced to slash jobs as telecom operators delay and cancel orders in the wake of a global economic slowdown.
Marconi sold businesses worth more than £9 billion as it raised funds to turn itself into a purely high-speed telecoms equipment company. Marconi, changed it name from GEC, after selling its defence business to BAE Systems for £7.7 billion in November 1999. 
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