30 September 2002 -- London-based business communications service provider COLT Telecom Group plc is expanding its restructuring program to cut another 800 jobs over the next 12 months. This is in addition to the 500 jobs cuts it announced in February. At the end of 2001 COLT had 4900 staff.
These actions are expected to achieve full-year cost savings of up to GBP40m in addition to estimated full-year savings of GBP20m from the reduction announced in February. A provision of about GBP25m will be made in Q3/2002's results for the expected cost of the programme.
The latest measures are a result of improvements in sales and operating efficiency from a move by COLT to a new pan-European organisational structure following the completion of its core network infrastructure.
COLT will also take an exceptional charge of GBP550m for a write-down in Q3/2002. That quarter's revenue is expected to be similar to Q2's GBP258.3m, which was up 12% year-on-year due partly to picking up business from KPNQwest.
President and CEO Steve Akin said: "My priority at COLT has been to ensure that we have the right organisation in place to support our next phase of growth. We have completed the construction of our core network infrastructure and are now in a position to manage the business differently.
"While trading performance is encouraging, in today's business environment it is important that we continue to achieve improvements in revenue mix, employee expenses and other operating expenses. By operating as one pan-European company, we can continue to develop our local, pan-European and eBusiness capabilities from a lower cost base."
COLT is 54%-owned by Fidelity Capital, the emerging business development arm of Fidelity Investments. In July, Fidelity replaced COLT president and CEO Peter Manning with Steve Akin, a former head of Fidelity Capital. Fidelity has also recently installed its own Barry Bateman and Andrew Steward as chairman and acting chief financial officer, respectively.
COLT Telecom Group has over 14,000 network services and eBusiness customers with high-bandwidth local networks in 32 European cities in 13 countries supported by a series of Internet Solution Centres and inter-linked by a 15,000 route-km high-capacity fibre-optic long distance network.