"We have reached the regrettable but unavoidable decision that there is no choice but to make further compulsory redundancies," chairman and chief executive Richard Li said in a letter to staff.

Mr Li said that sluggishness in the Hong Kong economy and intensifying competition in the fixed-line telephone sector had forced the company to slim down, and warned that he could not rule out further lay-offs.

PCCW, which employed 14,000 at the end of 2001, announced close to 1,000 redundancies last year.

Back in profit

Last week, PCCW reported a 2001 net profit of $243m (�171m), slightly beating expectations.