Revamp puts 2,000 jobs on line at CWC revamp puts 2,000 jobs on the line

THE cable and telephone operator Cable & Wireless Communications is preparing to unveil a sweeping restructuring which could result in a reduction of up to 2,000 jobs throughout the company.

The 12,000-strong workforce is due to be given details of the reorganisation next month following a board meeting in the next week to decide on the level of the job reductions.

The cost-cutting drive follows an "optimum resourcing review" put in train by Graham Wallace, CWC's new chief executive. He has been seeking ways to make the organisation leaner and to align its structure more closely with its markets since his arrival last year. A large number of the job reductions are likely to be among backroom staff as CWC introduces more efficient procedures into the business.

Insiders insisted that the review could create new posts elsewhere in the company which could reduce the net level of job losses substantially.

The review, which has been carried out by the accountants Coopers & Lybrand, is understood to have recommended radical action to refocus CWC on growth markets such as data processing and the small- and medium-sized business sector.

Since the creation of CWC through a four-way merger of Mercury, Nynex CableComms, Bell Cablemedia and Videotron, the workforce has remained static at 12,000 even though the group has reduced the number of call centres from 10 to three and merged its five network control centres onto two sites.

There has been a recruitment freeze since the beginning of this year while the Coopers & Lybrand review is completed. A spokesman called the possibility of up to 2,000 job reductions "the worst case scenario being bandied around within the organisation". Last year 400 managers went from the 1,000 CWC inherited at the time of the merger, producing significant cost savings. But the Coopers report has identified further substantial scope for productivity improvements through the incorporation of more information technology.

The spokesman declined to comment on the level of job reductions or how many new vacancies could be created as part of the overhaul, pointing out that before the recruitment freeze there were 3,000 vacancies in the group.

In order to reduce the redundancy bill, CWC is likely to offer jobs elsewhere in the organisation to those whose posts are being made redundant. Natural wastage is also expected to account for a sizeable number of reductions because staff turnover in telecoms is above the industry average.

Since Mr Wallace's arrival CWC has embarked on a pounds 400m upgrade of its long-distance fibre network. The investment is in addition to the pounds 1bn being spent each year to build out the cable network. It has also unveiled its plans for entering the digital market through a programming link-up with BSkyB and a software deal with Netscape and Oracle to give customers high-speed access to the Internet.

CWC has a just over 2 million customers, of whom 760,000 are cable television subscribers. It will launch the digital service this autumn offering access to up 200 channels.

There has also been a high turnover in its marketing department, with two senior executives departing in the last year. The current advertising campaign, which is costing pounds 50m, on top of the annual pounds 50m marketing spend, has had mixed reviews.

One of the areas CWC intends to target for expansion is data processing. In January this year it acquired the data company Anite for pounds 47m. At present, data communications make up about 10 per cent of telecoms traffic, but CWC believes this could grow to 50 per cent within five years.