New gloom rocks tech companies

TECHNOLOGY shares were hit as a triple-whammy from global heavyweights Ericsson, WorldCom and Lucent showed that recovery talk was premature. Mobile equipment maker Ericsson is laying off up to 17,000 worldwide and asking investors for a further £2bn. Sales are falling faster than feared, dashing hopes of a return to profit this year. It employs 1,000 in Britain.

Telecoms operator WorldCom also cut sales forecasts. Technology group Lucent is shedding a further 6,000 staff, although a 6% rise in sales offered a glimmer of hope. That lifted rival Marconi 1/4p to 7p. Jabil, which bought two Marconi plants, axed 700 jobs.

Robin Hardy, analyst at WestLB, said: 'No one can see where recovery will come from, and that includes those running the companies. Guidance is getting less and less.'

Ericsson's warning added to gloom from stronger Finnish rival Nokia last week. Vodafone fell 5 1/2p to 111 3/4p. It is buying out minority investors in Germany for £270m and is expected to reveal a 1% sales rise.

In computer services, a much bigger part of Britain's hi-tech industry than hardware, the picture is more mixed. Mark Hunter, chief executive of Axon, said: 'Anything to do with internet consulting is dead. Strategy consulting is in bad shape. But, in systems work and applications management, we are hiring.' Axon's co-founder and chief operating officer, Don Kirkwood, quit after seven years.