The telecoms arm of conglomerate Wharf (Holdings) yesterday revealed it had laid off 13 per cent of its workforce 'in response to the economic recession and the more competitive market place that lies ahead'. Analysts said the firings fuelled rumours New T&T was slowing its telephone investments and soon would be merged with sister company Wharf Cable to create a combined delivery and content giant. New T&T president Leslie Harris - who resigned this month to return to Britain - denied this, saying it was 'wrong to ascribe the lay-offs to the outcome of the Government's telecoms and broadcasting review'. 'We are continuing with our investments, while also gearing up to meet new opportunities,' he said. A second public consultation paper published last month outlined moves to open up the telecoms and broadcasting markets, which could affect Wharf's competitiveness. Analysts said a combined company would arguably be better positioned to compete in the new environment. The two companies already share some of the development costs of laying their fibre-optic networks and are said to be working together on a way to deliver telephone services via cable. But Mr Harris said it was too early to comment on the impact of the Government's review, since its policies had yet to be finalised. He said, though, the company was 'considering the changing rules in broadcasting and telecoms'. 'We had fit the business into one set of rules and now are being confronted with a different set,' he said. He said the 80 employees - mostly administrative staff - were dismissed as part of a corporate restructuring to 'gear up to compete in the new environment'. The company has 550 staff remaining, with no plans for further redundancies or wage cuts. 'We are at a different stage of our evolution and the restructuring aims at achieving a competitive cost structure . . . to optimise operational efficiency and to focus on customers,' he said. Mr Harris said 'investments were being refocused to address the market's changes', including the onset of international simple-resale (ISR) in January. ISR will allow firms to buy long-distance minutes in bulk for re-sale. 'Facing further deregulation next year, [we] must prepare now to capture this business opportunity and to fight off additional competition which will arise'.