Telecoms company Cable & Wireless has said it is to cut 3,500 jobs in its global division.

I am amazed that Graham Wallace is not looking to fall on his sword

Tony Craze, Stockbroker

A spokesman said the majority of the jobs would go outside the UK, reducing staff numbers to about 9,000.

The company also announced heavy losses.

C&W's shares dived 36% to 83 pence on Wednesday, mainly because of concerns about the cost of the redundancy programme.

Withdrawing from the US

The decision to restructure and cut jobs was made after the company carried out a review of its global business which provides website hosting and telecoms services for companies.

It is now planning to withdraw from much of the domestic business market in the US and on the European continent but will continue to operate for multinational companies.

Graham Wallace has resisted calls to resign

The group will close 23 of its 42 data centres around the world.

C&W Global's business in the UK will also be reshaped to reduce costs.

The company said that the measures should save about �400m ($635m) a year.

But the cost of restructuring will amount to approximately �800m.

Staying put

Chief executive Graham Wallace said: "These are tough measures in a tough market."

In a conference call with reporters he was asked if he had considered quitting.

"I have not thought about resigning, I have got a job to do here and I intend to do it," he said.

"I am amazed that Graham Wallace is not looking to fall on his sword as a result of seeing the share price at 90p," said Tony Craze at Goy Harris Cartwright Stockbrokers.

C&W's former chairman Lord Young said on BBC Radio: "Whoever was the architect of this strategy must bear responsibility.

"It's happened every time a new technology has come on the scene, you get a bubble and you get all sorts of people chasing rainbows," he added.

Disappointed investors

The company's share price fell at the beginning of this week after media reports about the planned restructuring, but after the details were released, the stock dived.

"The fact is that the �800m cash restructuring charge has hit the market harder than expected," said Lehman Brothers analyst Mark Davis.

"There is also maybe a degree of disappointment that nothing is happening with management.

"Perhaps not withdrawing more completely from parts of the US business is a further cause for disappointment," he said.

The group made a loss of �107m in the six months to September. But if exceptional costs are included, the loss amounts to �4.4bn.