CITIC east plans to lay off nearly 90% British Dadong will exit Chinese

Yesterday, informed sources told the "First Financial Daily" exclusive revealed that second British cable and wireless communications company (Cable&Wireless PLC) in China joint venture company CITIC Dadong broadband network technology limited liability company (hereinafter referred to as "CITIC East") suddenly announced in March 27th, will cut 80%~90%. The result of a sudden, the business has Chinese CITIC east face paralysis.

Once the foreign capital to enter the China Telecom industry banner of cable and wireless, it may gradually withdraw from the market China.

Lay off nearly 90%

"The news came so suddenly that the whole company blew up." A CITIC Dadong insiders. Because the decision is from the board of directors of the company CITIC Dadong, senior management also feel be taken by surprise.

As early as last year, CITIC East began layoffs, the number of employees from the original more than and 140 people, reduced to nearly 100 people, before this, such as layoffs 80%~90%, that means CITIC Dadong only the remaining more than and 10 employees.

At present, in addition to Beijing Dadong CITIC headquarters, as well as Shanghai, Guangzhou, Shenzhen, Dalian four branches, of which Shenzhen branch staff has almost gone.

"2006 was a year of CITIC Dadong to flex its muscles." Informed sources said that CITIC East was founded in 2004, the cable bureau sent over the development of products, and spent more than a year. This year has been able to promote the wide range of products.

But because the cable and wireless losses last year nearly 5 billion 100 million pounds, from the beginning of this year, the overall contraction of global business, eventually spread China company.

7 working group to replace the original management

The sources, the board of directors of the company from mid March to put pressure on top to upgrade CITIC Dadong, business as soon as possible, but in a few days to the joint venture company to poor performance, a serious shortage of cash flow in the company on the grounds, announced the decision, and decided not to develop new customers.

At present, the company's board of directors has set up a working group of 7 people, the company's management overhead, the management team will be based on the instructions of the working group to carry out routine affairs. The working group began to make preparations for employee compensation and other matters.

Exit China?

CITIC CITIC Dadong Network Limited and cable & Wireless in 2004 jointly set up the value-added telecom services company, registered capital of 17 million U.S. dollars, to provide cross regional internal communications solutions for small and medium sized enterprises.

According to reports, the cable Bureau invested $5 million in CITIC East, according to the original partnership agreement, cable and wireless to the company should also continue to inject $10 million this year. The reason for the introduction of a substantial layoffs, in fact, want to give up the Chinese market, or a comprehensive exit from the Chinese market.

"If only a dozen people, CITIC Dadong business must not function properly, cable and wireless can no longer inject. In addition, China's business paralysis will lead to a decline in quality of service, and ultimately lead to the loss of existing customers, so the company will not have to compensate for this." The source pointed out that if the company officially announced the closure, it is necessary to compensate the existing more than and 100 customers, at least $about 1000000000.

CITIC Dadong customers include Jincheng Logistics, trust mart, Little Swan and other large companies.

Insiders believe that the cable administration in the Chinese substantial layoffs will certainly affect the existing customer service, the group brand is quite disadvantageous.

"First Financial Daily" this statement to CITIC Dadong relevant high-level verification, the answer is: the board of directors has not disclosed the company that matters.

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Cable and Wireless

Cable & wireless (Cable& Wireless Plc) was founded in 1872, one of the world's top 500 enterprises. It provides voice, data and IP services for business users and individual consumers, providing services to other telecom operators, mobile operators and content, applications and Internet service providers. Business in more than and 80 countries, with more than 130 years of experience in telecommunications services, the world's largest telecommunications market share of 1/4.

November 2002, announced the cable and wireless company, loss widened, laying off 3500, and a contraction in overseas business.

In January 31, 2006, the cable bureau announced that CEO Francesco Caio will be leaving at the end of March, and the large-scale restructuring of the group, is divided into two parts of British and international business. In February, they said they were looking for a chance to sell their 20% stake in Bahrain telecom. At the beginning of March once again came to the cable and wireless company will sell its overseas business and operations, layoffs of 3000 people worldwide, the termination of the contract 90% customers, further withdrawal of the overseas operations of investment.

Cable & Wireless executive director John Pluthero said the cable Bureau currently has about 30 thousand users, the company plans to the scale of the user base by 30 thousand reduced to 3000 large enterprise users at present.

The fiscal year to March 2005, a total of cable and wireless net loss of 5 billion 100 million pounds.

It is understood that, as early as 1983, the cable Bureau and the Shenzhen municipal government has established the first domestic telecom operators joint venture Shenzhen Shenda Telephone Company Limited, the shareholding of 49%, but this marriage was "broken in 2004". In addition to the current CITIC Jiro, cable and wireless at home there is a cable and wireless communication technology services (Shanghai) limited liability company, a wholly owned subsidiary of more than and 10 employees.