Canning Fok chuckles as he announces job cuts, says they should boost morale Hutchison Whampoa has cut 750 jobs from its telecoms arm, blaming the government for creating an operating environment worse than in the 1998 financial crisis. Group managing director Canning Fok Kin-ning said the recent 'unreasonable' decision by the telecoms regulator to revoke an under-used mobile frequency licence by 2008 was the main trigger for the cuts. Mr Fok said revocation of the CDMA (code division multiple access) licence held by Hutchison Telecommunications International Ltd (HTIL) had cramped the company's ability to compete. He also cited intense competition in the market. But the Commerce, Industry and Technology Bureau said it had been 'a commercial decision of Hutchison to lay off their staff'. It said subscribers to Hutchison's second-generation CDMA service had declined sharply to 26,000 last July and the decision not to grant Hutchison a new licence took this into account. Concluding a controversial consultation, the Office of the Telecommunications Authority ruled in November that Hutchison could retain a third of its originally assigned CDMA bandwidth and run it for another three years. Remaining CDMA customers would then have to be moved to other services. Despite the bad news he was bringing, Mr Fok adopted an upbeat mood at the press conference to announce the cuts. Chuckling, he claimed the move should raise the morale of remaining staff because they would have 'better job opportunities'. The 750 staff represent 19 per cent of HTIL's 3,900 workforce in its mobile and fixed-line divisions. Not all of them will be redundant, as 480 staff will be moved off HTIL's payroll to the company's IT outsourcing partners, HP and NEC. Mr Fok said the 270 redundancies and outsourcing would save HTIL $250-300 million a year. He refused to rule out further staff cuts. 'As a responsible corporate citizen, even at the toughest times such as 1998, we didn't fire anyone,' he said. 'But Ofta's decision has given us new inspiration ... what we are doing today is a reflex to the government's latest policy. 'We are no fools ... we have set a target then we have to do it. That is how the world operates. 'As a company we have to make money or we will be in trouble. To answer your question whether we are immoral, we consider ourselves the best citizens.' HTIL chief executive officer Dennis Lui Pok-man said staff cuts and outsourcing were also taking place in Thailand and Israel, where close to 400 employees were outsourced to third party IT firms 'to boost cost-effectiveness'. For the first half of this financial year, HTIL's mobile unit, Hutchison Telecom, made a net loss of $195 million, compared with a $84 million net profit a year ago. Separately, Mr Fok also gave the latest update on the group's 3G worldwide subscriber numbers - 6.8 million as of yesterday, up from 6.3 million on December 23. He said its 3G UK business last month reached break-even in ebitda (earnings before interest, taxes, depreciation and amortisation).