C&W reshuffles senior management

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C&W reshuffles senior management

Cable and Wireless has reshuffled the senior management team of its cash-strapped global data services division, C&W Global, in an attempt to assure customers and investors it is serious about restructuring plans for the division, the London company announced yesterday (Tuesday).

As part of the reshuffle, Don Reed, formerly chief executive officer of C&W Global, will be based full-time in the US, charged with concentrating on regulatory, government and other corporate matters. C&W Global provides Web site hosting and telecommunications services for corporations.

Reed's operational responsibilities for C&W Global are being reassigned to Adrian Chamberlain, formerly the director of group strategy and now CEO of Global Services and Europe/Asia, and Simon Cunningham, CEO of C&W America.

Cunningham is to report directly to C&W CEO Graham Wallace who will become more directly involved in the restructuring of the business in the US.

Additionally, Global chief financial officer Donald Muir will now report directly to C&W finance director David Prince, who will take on more responsibility for Global's finances.

The move comes four days after Moody's Investors Service announced it was downgrading C&W's credit rating to junk bond status, forcing the company into a scramble to find £1.5bn in reserve cash to cover an agreement made three years ago with Deutsche Telekom.

As part of Deutsche Telekom's deal to buy C&W's half share in mobile phone operator One2One in 1999, C&W is responsible under a "ratings trigger" clause to cover any potential tax liabilities that may result from changes in the credit rating of C&W's debt load.

Last month, C&W announced its 12-month restructuring plan for C&W Global, which is designed to save around £400m a year in operating costs, and will reduce the division's headcount from 12,500 to 9,000 employees. Most of those job cuts will come in the US.

C&W opted for a total exit from the US and continental Europe except for multinational enterprise and service provider customers, after reporting that, in the six months ending 30 September, operating costs for C&W Global, before exceptional items, were £813m, with a decline in revenue of 5%.

Fixed assets in the division were written down in the period by £787m and the remainder of the division's goodwill of £2.7bn has also been written off.

David Nash, who was set to take up the chairman's position next month, resigned in November and C&W is conducting a search for a new chairman.

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