Hong Kong's PCCW slashes 506 jobs


PCCW chairman Richard Li said the company could not guarantee that there would not be further job cuts.

HONG KONG, China -- Hong Kong Internet and telecom firm Pacific Century CyberWorks (PCCW) slashed 506 jobs Wednesday, affecting staff across the company.

PCCW said the job losses were part of a vast cost-cutting effort that will freeze wages and new hiring for the next year.

A company official also said PCCW would take a one-time charge of HK$78 million (about $10 million) against 2001 earnings related to the job cuts.

'Difficult economic situation'

PCCW said it would save HK$190 million (about $24 million) a year in salary and benefits as a result of the job cuts.

In a letter to staff, 35-year-old chairman Richard Li said the company could not guarantee that there would not be further job losses.

Before the cuts, PCCW had around 14,000 staff members.

"It is a direct result of the extremely difficult economic situation in Hong Kong and globally, and of intense competition within our industry arising since the implementation of the current regulatory framework," said Li.

In Hong Kong, the former monopoly faces fierce competition in both local and long-distance telecom services.

Last July, PCCW slashed 340 jobs in its Net operations as part of a general revamp of its Internet services strategy.

Analysts criticized the move, saying the firing of 340 staffers from a total workforce of 14,000 was hardly a significant cost-cutting measure.

Industry watchers have long commented that PCCW should seek cost savings through additional jobs cuts.

Investors cheered the latest restructuring effort by the one-time high-flyer, sending PCCW shares up 1.15 percent to reach HK $2.20 in afternoon trading.

Reuters contributed to this report.