The Swiss technology group, Ascom, has announced it is to cut 500 jobs - including 250 in Switzerland - as it seeks to further reduce its debt.This content was published on January 29, 2003 - 08:49
The Bern-based company also said that it anticipates losses for 2002 to be between SFr260 million ($191 million) and SFr290 million.
In a statement released on Tuesday, Ascom blamed the poor market situation in the telecommunications sector as well as the underperformance of its Powerline Communications unit for the losses.
The company confirmed that half of the job losses are to affect employees in Switzerland.
"We have to get rid of our loss-making units and concentrate on areas of profitability," said Juhani Anttila, the new CEO of Ascom.
Trade unions critical
Trade unions have criticised the job cuts, accusing Ascom of dismantling the company without a plan.
The new round of cuts adds to the 1,300 jobs that Ascom has shed in the past 18 months.
Ascom's head of finance, Rudolf Hadorn, said the job losses would save the firm SFr20 million this year and a further SFr40 million in future years.
The newly announced redundancies are to take place in the firm's unprofitable units by the end of 2003.
Tuesday's statement also said that the firm had reduced its net debt to SFr300 million from SFr631 million by the end of 2002.
It added that Powerline - which offers Internet access through power sockets - is to be reduced to a technology company where sales and manufacturing activities will take place under licensing agreements.
Zurich Cantonal Bank said that Ascom still faces liquidity problems despite its reduction in debt.
It added that the company has been operating in a strategic vacuum since it appointed a new CEO last month.
Bank Vontobel believes that to stop the "cash drain" at Ascom, the company needs to urgently sell-off those units that do not belong to its core business.
Last month, Ascom chairman Anttila took on the dual mandate as CEO to steer the company through a major restructuring plan that it announced last June.
The company has been attempting to reposition itself as a telecoms provider, but with little success. In 2001, Ascom reported a loss of SFr396 million.
Shares in Ascom - which will report its 2002 results in March - closed six per cent higher at SFr3.82 on the news.
The stock has lost 86 per cent of its value over the last year.
swissinfo with agencies
The new round of job cuts adds to the loss of 1,300 positions in the last 18 months.
The company said it reduced its net debt from SFr631 million to SFr300 million by the end of 2002.
Ascom expects a loss of between SFr260 million and SFr290 million in 2002.
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