Telecoms equipment maker Marconi, which said earlier this month that it would axe 800 British jobs, warned on Tuesday (May 16) of a continuing deterioration of its profit margins owing to "fierce" competition from rival telecoms equipment manufacturers. The announcement by Marconi, which has decided to cut staff after failing to win a crucial BT Group contract, came as it unveiled an operating loss of 99 million pounds (144 million euros, 182 million dollars) in the year ending March 31, 2005 compared with a loss of 241 million pounds during the same period a year earlier.
"Pricing pressure remains fierce across products and services and this, together with changing business mix, will impact gross margins in the 2006 financial year," Marconi said in a statement. It added that it expected a reduction in BT revenues from equipment sales and associated services of about 50 million pounds during the year ending March 31, 2006 compared with a year earlier.
Marconi, which is only just returning to an even keel after radical financial restructuring back in 2002, began reviewing staff after it was frozen out of a lucrative contract to supply telecoms operator BT Group with optical and network access hardware.
It failed to become one of eight preferred suppliers for the 10-billion-pound five-year BT project, entitled '21st Century Network'.