Energis to swing axe on 500 jobs

ENERGIS is likely to cut about 500 jobs in the south of England as part of a radical cost-saving plan. The telecoms group's operational centre in Reading as well as London offices in Park Street and the Embankment among sites likely to be hit.

Further job losses are expected in Europe, where operations face either closure or a radical overhaul as part of an impending group rationalisation. The cuts, coming on top of the 350 jobs axed last year, are designed to slash costs by £30m by 2003.

Energis, which issued a warning last week that its full-year core earnings would fall short of targets, is due to complete a cost-saving review by mid-February.

Meanwhile, it is understood that chief financial officer Bill Trent is likely to remain in his post at least until the review is complete. He is facing calls for his resignation after last week's warning wiped-out more than half of the former FTSE-100 company's market value.

An earnings shortfall threatens to leave Energis in breach of banking covenants on its £725m bank facility. The group declined to clarify how much of the existing facility has been drawn down, leaving the extent of its available funding unclear. However, it said creditor banks, led by Dresdner, have indicated their continuing support for the group.

A bridging facility offered by Dresdner to help finance the group's expansion into Europe, through major purchases in Holland and last year's purchase of Ision in Germany, expired at the end of December. Including dual bond issues, the group has more than £1bn in debt. Energis shares edged up 1 1/2p to 19 1/2p.