Marconi axes 800 jobs as contract losses bite

Marconi is to axe 800 jobs in the wake of last week's decision by BT Group not to award the telecoms equipment maker any of its £10bn network upgrade work.

The stricken company, which is looking for a buyer, revealed yesterday the jobs would go at its Coventry and Liverpool sites. Marconi, once at the core of the GEC industrial giant, will cut its historical ties with Liverpool, where its Edge Lane site will close. The Coventry job losses are a further blow to the Midlands, which has already seen 5,000 posts lost at the collapsed MG Rover and a further 850 recently axed by Peugeot.

Marconi has also instigated a structural reorganisation to rationalise its business. A quarter of its £1bn-plus turnover is generated by BT contracts but this existing business will start to disappear over the next few years and will not be replaced with new contracts.

Unions accused the company of trying to bury the bad news on the day of the general election results.

Pat Maloney, an Amicus senior representative and software engineer at Marconi's Liverpool site, said: "The main reaction is shock and devastation, obviously, but there is also a lot of anger at the timing of the announcement. For it to come out on the day of the election result smacks of someone choosing a good day to bury bad news."

Peter Skyte, the national officer of Amicus, said: "This is a big blow for the company, its workforce and highly skilled jobs which the UK cannot afford to lose."

However, the award by BT of its network upgrade contracts to eight overseas companies is still expected to result in more than 1,000 jobs being created in the UK. Huawei Technologies, the Chinese company, said it needs to recruit at least 500 people for its Ipswich site to meet its new BT contracts. The US firm Cisco, another contract winner, has said it will be creating 160 new jobs while Lucent, Siemens and Fujitsu have all announced plans to recruit more staff as a result of BT contract wins.

Elsewhere BAE Systems and Airbus, the aircraft maker in which BAE has a stake, have taken part in recruitment meetings at MG Rover's Longbridge plant.