The group said the job losses were needed to cope with changes in public policy, a reference to the liberalisation of the telecommunications market. The introduction of new technology is also forcing a reduction in the workforce. William Ferguson, the company's chairman and chief executive officer, said: 'There is simply no alternative for the success of our business.' He predicted that the restructuring would save dollars 1.7bn a year before tax after the three-year process was complete.
Yesterday Nynex announced a fourth-quarter net loss of dollars 1.24bn after charges of dollars 1.47bn, most of which are related to the reorganisation. The company, which runs the telephone service in New York State and New England, said operating revenues rose to dollars 3.4bn in the three months to 31 December from dollars 3.3bn a year earlier.
The number of telephone lines installed rose by 2.7 per cent to 16.1 million, the biggest increase since 1988. Nynex said the growth was helped by increased marketing efforts and improvements in quality.
Nynex has emerged as one of the most important players in the cable television industry in the UK, and is funding a large independent telephone and television network in the North-west of England. The venture will cost up to pounds 1bn, part of Nynex's planned investment of pounds 1.5bn in Britain.
A spokesman in the UK, where Nynex employs 1,500 people, said the losses would not affect the investment. The company's UK franchises cover 2.7 million homes of which almost 1.5 million are in the Manchester area.Reuse content