Cable & Wireless (C&W) is to cut its UK staff in half and decimate its targeted customer base in order to stay relevant to telecoms buyers.

The telecoms giant will reduce headcount by 50 percent and its number of customers by 90 percent as part of its stabilisation plans.

Chairman John Pluthero said that the firm will restructure to focus on 3,000 top-end customers rather than the 30,000 previous total. Between 2,500 and 3,500 staff will lose their jobs from the current UK roster of 5,500.

The firm also envisages that 60 percent of revenues will come from managed IP services whereas voice currently accounts for that share today. Pluthero said the recalibration would create a profitable $2bn revenue business focused on service.

Pluthero said putting “clear blue water” between C&W and rivals in service would differentiate the firm. “I’ve had many emails saying ‘bang-up job’ but not one that says ‘great IP platform’,” he said. “It’s about culture.”

However, industry watchers are skeptical.

“It isn't as simple as a ‘two-horse race’ as he suggests for the UK's top business customers,” said Chris Lewis, enterprise practice leader at analyst firm Ovum. “If C&W doesn't find focus it will be an also-ran as IP and its associated convergence plays become mainstream."

Paul MacGregor, UK head of global project consultancy PIPC, claimed C& W’s management strategy had caused current woes. “These problems stem from the integration with Energis from which C&W is currently not reaping much value,” he said. “Surely part of the point of buying Energis was to make substantial savings but the management doesn’t yet seem to have a grip on this. It’s about time they started wielding the axe but they are not taking out the right people. The consistent failure of C&W to implement effective investment strategies is the fault of senior management.”