Telecoms operator Telia has announced it is cutting over 400 jobs in its ailing international carrier unit to make it profitable.
Telia, which is merging with Finland's Sonera, said it would sack slightly more than 50 per cent of the unit's 800 employees worldwide, close Asian operations and its British voice reseller business and stop offering domestic capacity services in the US.
The carrier business has long been a drag on the group's earnings because slumping demand for telecoms capacity has meant that its $1.2 billion investment in a 40,000-kilometre fibre-optic network in Europe and the United States has failed to pay off.
Telia International Carrier will now effectively freeze all acquisitions and focus on cutting costs instead of taking advantage of cheap prices to buy more network assets as forecast earlier this year.
Telia chief executive Mr Anders Igel also said the company had an open mind about selling the business once it returns to profitability.
The restructuring measures will cost 3.5 billion crowns ($374.5 million), a sum that will negatively impact the group's results this year, mainly this quarter, Telia said.
But they will allow the business to return to positive cash flow sometime in 2003 and to profitability at an unspecified date, it said.