Reach to cut more jobs

23 May 2003

Financially troubled undersea cable venture Reach has announced plans to cut a quarter of its workforce over the next two weeks, as part of its restructuring plan. Reach, controlled 50-50 by Australia’s Telstra and Hong Kong’s Pacific Century CyberWorks (PCCW), said that around 250 people will be made redundant, 40% of which will be offered voluntary buy-outs. The news follows a series of debt negotiations between the two parent companies and the bank syndicate which lent USD1.5 billion to Reach. The company has already cut it workforce from 1,200 to 960 this year. In February Telstra and PCCW were forced to write down the value of Reach by USD1.6 billion and last month they announced new financing for the troubled company in a deal that delayed the repayment of its debt until the end of 2010.