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MERCURY CUTS POSITIONS, EXPANDS WIRELESS UNITS TO IMPROVE STOCK’S VALUE

LONDON – Cable & Wireless plc said it will eliminate 2,500 positions at its Mercury Communications Ltd. subsidiary by March in an attempt to become more competitive and increase shareholders’ return on their investment.

Despite the cuts, the company said investments will be rerouted to wireless services, such as calling cards, new prepaid calling cards and Mercury One-2-One, the company’s U.K. cellular operation. A separate networks and services division will be created.

“We now need to focus our resources on building a strong differentiated position in customer sectors which have strong growth prospects,” said Duncan Lewis, Mercury’s chief executive.

About 2,000 administrative and support jobs will be eliminated as well as about 500 positions held by contract and temporary staff, Mercury noted.

The company tends to seek buyers for Mercury’s customer premises equipment business and will consider a management buy out, Cable said. Mercury plans to outsource its directory inquiries and withdraw its pay-phone service.

Mercury’s service division will be arranged into five areas: international business services, corporate business services, enterprise business service, home business services and partner services.

Mercury will continue to provide service to residential customers but hopes that can be done through third parties, such as cable television operators, the company said.

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