C&W cuts 600 jobs and shuts London HQ

Cable & Wireless has announced major restructuring that will see 600 jobs lost in the UK and Europe, and will return £250m to investors in a buyback scheme.

The company has given no details on where precisely the jobs will be lost, but C&W's London HQ will be shut.

Announcing its half yearly results, which saw operating profit rise to £156m from £124m corresponding period in 2003, the telco also said CEO Francesco Caio will assume direct control on UK operations.

C&W also revealed that its exit from the US had cost it £80m less than predicted but still made a £220m dent in the company's balance sheet.

Ovum analyst Julian Hewitt said that while the company has made a good turnaround since its loss-making days of a few years ago.

"C&W has made amazing progress since its near collapse at the end of 2002. Much of its US and Japanese businesses have been disposed of, much needed focus has returned to the UK business, the finances have been brought under control, and the top line is almost stable," he said in a research note.

C&W's shares rose seven per cent on the news this morning.