Marconi reorganizes, cuts staff

(Telephony) Marconi announced a reorganization that will result in the company operating with three customer-facing units and 3000 fewer employees during the next year.

As a result of the plans, Marconi expects to take a non-recurring charge of $5.74 million in fiscal 2001. The reorganization is expected to result in savings of more than $2.87 million annually by the end of the current financial year to March 2003.

The organization into three divisions--serving the networks, wireless and enterprise markets--is a result of the acquisitions Marconi has made in recent years, said a spokesman.

“We have built over the last couple of years a very strong conglomerate of companies that are all recognized leaders in their technology space,” he said. “It is that which we are consolidating.”

As part of the reorganization, the company will expand factories in the U.K. at Ansty, Nottingham and Northampton.

As a result of the consolidation, Marconi expects to eliminate 3000 positions from its global work force during the next 12 months. The layoffs will be across several disciplines and about half will be in the U.K. Marconi currently employs about 55,000 worldwide.

The reorganization, including the layoffs, is not a direct result of the economic slowdown in the U.S., but the slowdown affected Marconi’s decision, according to the spokesman. “What the market conditions do is make it even more important to reorganize as efficiently as we can,” he said.

Despite the staff cuts, Marconi estimates that it will be a net creator of jobs in the U.K. in 2002, as it brings new plants online and makes changes to its product line.