4,000 jobs to go as Morgan and mmO2 wield axe

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The Independent Online

The job market was dealt another blow yesterday as mmO2, the mobile phone operator which owns the UK's Cellnet brand, and Morgan Crucible slashed nearly 4,000 jobs between them.

MmO2 said it planned to cut 1,400 jobs in the UK, scaling its workforce there back to 6,100, and another 500 positions at its German operation Viag, cutting that unit's staff to 3,400.

The mobile phone group, which is in the process of carrying out a rebranding to O2, is also closing 133 of its 320 UK shops as well as a proportion of its 130 outlets in Germany.

Morgan Crucible, which provides carbon and ceramic-based components, said it planned to cut more than 1,000 jobs around the world from its 15,000-strong workforce although another 1,000 jobs are at risk since it is transferring those positions to lower-cost countries.

It also said it was closing or reducing some of its manufacturing operations in Europe and the US but would not comment on how many facilities might go or where, geographically, the job losses would fall.

Shares in Morgan Crucible closed up 2p at 165.5p while mmO2 stock finished down 2.25p at 72.5p.

The mobile phone company said yesterday that its restructuring, the first major piece of financial footwork since its demerger from BT last year, would cost it about £110m but would produce savings of about £70m a year.

Peter Erskine, chief executive, said since the company's demerger, he had been focusing on ways to run the businesses "more efficiently" and "as one". The Communication Workers Union, which represents thousands of mmO2 workers, said, however, it would ballot for industrial action if the company insisted on making compulsory redundancies.

The plan came as mmO2 announced it had added 453,000 new customers during the final quarter of 2001, bringing its total customer base to 17.24 million. In the UK, it won 107,000 new users, bringing the total there to 11.1 million. In Germany, it added 262,000 users, boosting numbers to 3.65 million.

Mr Erskine said he was pleased that 12.8 per cent of the company's revenues in the period came from non-voice traffic, up from 10.7 per cent in the previous quarter. "If we keep doing what we've said in terms of keeping our lead in data, that's a great way to win the higher spending customers," he said.

The restructuring at Morgan Crucible, meanwhile, was the result of a review begun last October after the company warned that trading in September had been "poor". It said yesterday that the move would cost it around £70m but was expected to produce savings of about £30m a year from 2004 onwards.

Despite the bad news, the company said trading since October had been "in line" with its expectations. The company's performance in 2001 overall was "in line" with market expectations, while net borrowings were cut to beneath £280m.

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