PCCW's Li outlines further cost-cutting plans
By Mike Newlands, for Total Telecom
Thursday, September 13, 2001
Hong Kong's Pacific Century CyberWorks Ltd. plans to cut more costs in the coming months, said chairman Richard Li.
However, earlier reports that suggested costs would be reduced through further job losses have proved to be unfounded
Speaking to analysts, many of whom have a firm sell recommendation on PCCW's shares, Li said saving costs is the company's top priority in the short term, and it is looking for US$100 million in savings over the next few months.
This would be achieved through streamlining company operations, such as eliminating unnecessary procedures and documentation in the work process, said Li.
He added that the company must be careful not to cut the muscle while cutting the fat.
CyberWorks laid off 340 Internet employees in July and Li said this, coupled with "natural attrition," has already saved $100 million.
The company bought ex-monopoly Hong Kong Telecom from Cable & Wireless last year, barely a year after it listed on the Hong Kong Stock Exchange as a company with few assets but plenty of ideas and plans. Part of its magic was also the Li name, as Richard Li is the youngest son of Hong Kong's most successful tycoon, Li Ka-shing.
Its own plans for its Internet businesses failed to materialize, and it now has $5 billion in net debt and only the slowing revenue stream of Hong Kong Telecom to support the debt repayments, hence the focus on cutting costs.
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