Colt Telecom is to get rid of one worker in six, in an operational shake-up amid the slide in the telecoms sector.

The business-focused telecoms firm, which in February announced 500 job cuts, has revealed that a further 800 posts were to go.

The latest cuts, which will save �40m a year in costs, come amid an ongoing telecoms slowdown which prompted Colt on Friday also to write down by �550m its estimate of the value of some assets.

"Given the recent downturn in the industry and in the overall economic environment... it is prudent to take further action to ensure that its asset base remains aligned with the realities of the market," a statement said.

'Further opportunities'

The lay-offs would accelerate plans to rationalise European in-country operations into a "pan-European organisational structure", Colt said.

The cuts would be "spread across the whole of Colt, every country, every operation", a spokesman said.

With its core network infrastructure now built, the company would be able to "improve" sales despite the workforce reduction.

"We have identified further opportunities to achieve our revenue growth expectations at lower cost," said Steve Akin, who was installed as Colt president and chief executive in July by shareholder Fidelity.

"By operating as one pan-European company, we can continue to develop our local, pan-European and e-business capabilities from a lower cost base."

The firm saw underlying profits hitting �17m for the July to September period, compared with �147m for the quarter before.

Friday's statement was welcomed by investors who sent Colt shares up more than 6% in early trade.

The stock stood 0.75p, or 1.9%, higher at 40.5p in late morning trade.