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Marconi pulls plug on pounds 34 m research.

Marconi has pulled the plug on pounds 34 million of research and development spending and put its wireless access platform up for sale.

The cut backs are part of its plan to reduce its operating base from pounds 1 billion to pounds 870 million by March next year and the 460 job losses involved are included in the 4,000 redundancies announced in January.

Marconi's factory in Coventry is likely to be unaffected by yesterday's decision, with its focus on the optical networks side of Marconi's business, but up to 70 jobs will go in Liverpool.

The R&D cutbacks follow a two month review of the access systems business, which operates out of the US, Germany, Italy and the UK.

Its high speed broadband access arm generated pounds 65 million of sales last half and the copper wire and ADSL division brought in pounds 345 million.

Following the cuts the two businesses will lose between pounds 50 million and pounds 100 million of sales by 2003, with the R&D spend savings offsetting the decline in profits.

Marconi has decided to concentrate its R&D on those technologies where it is certain they will grow sales quickly and generate a high return.

It is maintaining the mature copper wire and ADSL business but will not invest and more money in upgrading the existing product range.

Marconi's work on the next generation of fibre access into the home, which would allow fast speed broadband access, has been suspended because of lack of demand.

Marconi's shares yesterday added 1 /2p to 19p.
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Title Annotation:Business
Publication:The Birmingham Post (England)
Geographic Code:4EUUK
Date:Mar 21, 2002
Words:261
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