Marconi slashes 800 jobs over BT contract failure

Marconi is to cut 800 jobs in the UK after failing to land any of the contracts for the £10bn upgrade of BT's infrastructure last month.

BT will replace its circuit-switched networks with a single IP-based network as part of the 21st Century Network project and Marconi's share price initially plummeted 40 per cent after being left off BT's preferred supplier list.

Marconi warned at the time that it would have to cut costs and jobs as a result of failing to get the business and even pleaded with the government to intervene.

Now - on a morning dominated by blanket General Election news coverage - Marconi has announced a restructuring that will lead to the loss of 800 UK jobs.

Consultation with trade union representatives on the job cuts has already begun and Marconi said it is also investigating other cost reduction initiatives "with immediate effect".

A restructure of business units will also see Marconi focus its four key product groups in four regional centres around the globe.

Mike Parton, CEO of Marconi, said in a statement: "The new leaner organisation that we have announced today allows us to maintain our product roadmaps, focusing our research and development expenditure on our key product lines whilst making significant cost savings mainly in overhead areas to underpin profitability."