Eircom is scaling back UK operation

Eircom is scaling back operations in Britain in a move which will see at least 75 employees made redundant. It is expected to make a formal announcement on the matter today.

Eircom has an operation at Canary Wharf, employing 95 staff. It is understood the bulk of the workforce is drawn from Britain and will not be redeployed to the Republic.

The Canary Wharf offices were used for launching Eircom's attempt to win a 3G (third generation licence) in Britain. Eircom pulled out of the competition when the bidding rose above £2.1 billion sterling (€3.32 billion).

An Eircom spokesman confirmed the redundancies last night saying the scaling back of Eircom UK reflected the company's stated intention of focusing primarily on the Irish market - mooted by its chief executive Mr Alfie Kane last December, following the Vodafone offer for Eircell.

"The UK subsidiary will now centre on servicing the communications requirements of corporate customers and managing Eircom's international traffic flows," the spokesman said.

He said Eircom was retaining its UK presence and retaining "the option of future development, depending on improvements in the telecoms sector".

It is understood that staff in London and Dublin were informed yesterday of Eircom's plans to downsize in Britain. The company told staff it would retain a maximum of 20 people in London.

The company's UK operation was established about 18 months ago, when it was Eircom's stated intention to develop its overseas business.

Eircom employs 110 in Northern Ireland. The spokesman said there were no plans to scale back there now. "Northern Ireland is a logical extension of our business," he said.

Yesterday's announcement is the latest in a series of moves by the beleaguered telecoms group to streamline and refocus its business. In January, the company declined to provide further funding to Ebeon, one of the fastest-growing Internet consultancies in the Republic and a company in which it had a 51 per cent stake. Eircom had already put in £21 million (€26.66 million). Ebeon is now in liquidation and 170 people lost their jobs.

It also had a 30 per cent interest in Viasec, a Donegal-based software company, employing 50 people, which last month said it had run out of funds and was now being wound up.

Eircom shareholders will be given a fuller indication of the company's future strategy when the circular about the Vodafone offer is published, prior to the extraordinary general meeting next month. EIsland has offered €1.10 per share for the remaining, non-mobile assets.