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Earnings reports

Marconi to Lay Off 3,000

Marconi began to brief its employees this morning on a group-wide reorganisation. In his role as Deputy Chief Executive, John Mayo will be leading the implementation of this programme.

This will encompass:

  • the reorganisation of the Company’s activities into three customer-facing divisions: Networks, Wireless and Enterprise, which will be led by Mike Parton, Geoff Doy and Neil Sutcliffe respectively.

  • expansion plans to develop centres of excellence in the UK, at Ansty and Nottingham (Networks), and at Northampton (Optical Components). This is expected to create 3,000 highly skilled, high technology jobs.

  • the previously announced proposal to outsource the majority of its communications networks manufacturing capacity, with the transfer of up to 2,900 employees to Jabil Circuit Inc.

  • a proposed reduction of around 3,000 positions over the next 12 months, in addition to the outsourcing arrangements. These are a result of the reduced requirement for certain activities going forward, approximately 1,500 of which are based in the UK. the elimination of duplicate information systems through the implementation of a single company-wide systems platform.

    This reorganisation and systems implementation will result in one-off non-recurring costs that are expected to be in the region of £400M, which will be incurred in approximately equal amounts over the two halves of the current financial year. As a result, the Company expects to generate annual cost savings that will begin in the second half of the current year and gradually build up to in excess of £200M per annum by the end of the financial year to March 2003. Part of these savings will be reinvested in focused marketing campaigns.

    Trading Update for the year to 31 March 2001

    Despite a marked deterioration in market trading conditions in the final quarter of the year to March 2001, especially in the US, Marconi expects to report operating profits (before exceptional items and goodwill amortisation) of around £800M (£750M year ended 31 March 2000), within the current range of analyst forecasts, when it presents its preliminary results for the year ended 31 March 2001 on 17 May. Board Changes

    As previously announced, following the Company’s Annual General Meeting in July 2001, it is confirmed that Sir Roger Hurn will retire both as Chairman and from the Board, Lord Simpson will become Chairman, and John Mayo will become Chief Executive.

    Marconi further announces that, with immediate effect, Steve Hare is appointed to the Board as Chief Financial Officer to succeed John Mayo who takes on the role of Deputy Chief Executive. Steve was previously Senior Vice President, Finance of Marconi plc.

    www.marconi.com
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