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Ascom sheds jobs amid spiralling losses

Ascom said it did not expect markets to recover in the second half Keystone

The technology group, Ascom, announced on Tuesday it was cutting a further 150 jobs after making a first half loss of SFr100 million ($67.41 million).

This content was published on September 10, 2002 - 11:06

The Bern-based company blamed unplanned write-offs against goodwill and real estate.

The cuts will affect group support functions, including headquarters, IT services, communications, personnel services and financial services.

Ascom, which made a loss of SFr26 million in the corresponding period last year, has been going through a heavy restructuring programme.

The company said in a statement that "under difficult economic conditions", it had revenues in the first half of SFr1.093 billion (previous year SFr1.548 billion).

Adjusted for divestments and the influence of exchange rates, this resulted in a decrease in revenue of 12 per cent.

Ascom said it did not expect markets to recover in the second half, which would continue to be characterised by the consistent focusing, reduction of costs and divestments.

"Marked slump"

The company commented that an expectedly subdued first half was followed in the second quarter by a "marked slump" in the technology markets.

In its latest strategy plan announced in June, the company said it would focus on its core business of network integration, security solutions, wireless solutions and transport revenue.

Tuesday's statement said that management had nearly completed the first phase of its divestment programme. This included the sale of the Mailing Systems and iT SEC units.

For the investment-intensive technology areas and Powerline Communications (Internet via electricity cable), Ascom is aiming at strategic partnerships, joint ventures or sales and will clearly reduce the dependence on the telecommunications market, the statement added.

Operational advances

"In the first half-year 2002, in the course of the transformation, Ascom achieved important steps and recorded operational advances. However, the profitability is still unsatisfactory," commented CEO Urs Fischer.

Ascom said it had reduced its net debts by 34 per cent in the first half from SFr631 million at the end of last year to SFr416 million.

Shares in Ascom have fallen by more than 80 per cent this year, after slipping more than 70 per cent in 2001.

In a report on the company in July, the private Pictet bank of Geneva retained its "Neutral" recommendation on the shares.

"Ascom remains in the full throes of a turnaround and the lack of visibility in its underlying markets, aggravated by widespread doubts about Ascom's latest corporate revamp, make any recommendations hazardous," the report said.

"Ascom's track record makes it foolhardy to assume that this will be the final company facelift. We do not see any catalyst for Ascom's businesses that could set the company on a sustainable growth track," it added.

Over recent years, Ascom has experienced numerous management changes. In August, the company announced that the chief financial officer, Peter Germann, would leave at the end of this month, to be replaced by an unnamed "internationally experienced financial manager".

swissinfo with agencies

Key facts

150 jobs to be shed
First half loss of SFr100 million
80 per cent fall in Ascom shares in 2002

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