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PCCW shifts 3,000 to new unit
By Alex Frew McMillan
HONG KONG, China (CNN) -- PCCW will transfer 3,000 workers to a new technical-support subsidiary as the troubled telecom continues to restructure. The company will set up Cascade Ltd. to take over its network, support and maintenance operations as of January 1, 2003. The number of affected workers, most of them engineers and technicians, amounts to a quarter of the telecom's total work force of 12,000. Last month, PCCW shifted 1,550 workers to 17 spinoff companies. They voluntarily left the company to work for the spinoffs, to which PCCW guaranteed certain levels of business for the next three years. (Full story) PCCW said it will contract Cascade for technical support and network services, and the subsidiary will also look for other customers. Building new businessChief Operating Officer Michael Butcher said the move comes as PCCW tries to change its network-service operations into a money-making business. "We will look towards China, we will look towards Southeast Asia to build the company in the future," he said, according to Reuters news agency. He expects Cascade to start raising new business by the second half of next year, targeting customers such as banks running ATMs, retailers and manufacturers. Union workers were frustrated by the move, criticizing the company for announcing it before informing the workers concerned. In a statement, the PCCW Staff Association union called on the company to keep wages and benefits unchanged for the affected workers. Work force slashedPCCW was once the darling of Hong Kong's information-technology industry, expanding into various Internet businesses. But it has scaled those back, axing its pay-television operations and slashing workers at joint ventures such as Reach, which it owns with Australia's Telstra Corp. The company bought Cable & Wireless Hong Kong Telecom in 2000, and that fixed-line telecom business has become the linchpin of the company. It has already trimmed its work force by 20 percent since that acquisition, from 15,000. PCCW stock is down 2.96 percent at midday Tuesday, at HK$1.31, in a telecom selloff. That's outpacing the Hang Seng's 0.35 percent decline.
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