C&W pulling out of most U.S markets

Cable & Wireless today said it is pulling out of the domestic business markets in the U.S. and continental Europe except for multinational enterprise and service provider customers.

In addition, the company said it is reorganizing its operations in the U.K. and Japan to reduce costs and put greater focus on profitability and cash flow. The company will also cut the number of data centers it operates globally from 42 to 23.

These actions will include a workforce reduction of 3500 over the next 12 months, leaving the company with 9000 employees. In the U.S., headcount will be cut from 3900 to 1500 people.

According to C&W, the moves should save $951 million a year in operating costs and capital expenditures. The cost of the restructuring should be about $1.3 billion, most of which is associated with property and network leases in these areas.

A C&W spokesman said that in some cases, the company would continue to serve current U.S. customers not belonging to its new target markets. “We’ll continue to support those near our network infrastructure,” he said.

The spokesman declined, however, to say exactly which services in the U.S. would be discontinued. Among the services that the company will continue to offer after the restructuring, though, are managed hosting, content delivery, security, professional services and IP services.