Cable & Wireless (C&W), the telecoms giant that last year acquired small Scottish rival Thus, yesterday confirmed it will shed 600 jobs in the UK - although less than half of those cuts are now expected to occur north of the border.

Cable & Wireless (C&W), the telecoms giant that last year acquired small Scottish rival Thus, yesterday confirmed it will shed 600 jobs in the UK - although less than half of those cuts are now expected to occur north of the border.

Shortly after the £329m cash acquisition in October, C&W said it planned to make UK cuts of 700, equal to about 10% of the 7000 staff in its European, Asian and US (EAUS) division, as a direct result of the merger.

However, in percentage terms, the total number redundancies has been reduced to about 8.5%.

In Scotland, it was originally forecast that Thus's entire 800-strong workforce might be wiped out, but the number of lay-offs is now expected to be fewer than 300.

This number is also less than the 350 jobs that C&W, the UK's second-largest telecom after BT, in November had signalled might be cut north of the border.

An insider at C&W told The Herald yesterday: "We're not breaking it down geographically, but I don't believe the number of job losses in Scotland will be as high as 350.

"We are maintaining Thus as a headquarters in Glasgow for our national SME customers. While Thus's larger customers - such as HSBC, energy company ScottishPower and various government contracts - have migrated over the EAUS division, which takes care of our larger corporate clients."

Thus, which owns Demon broadband, currently employs some 600 at its head office in Glasgow's Charing Cross and 200 at a contact centre in Livingston.

Nonetheless, it is believed that a significant chunk of the job losses - though by no means all - will come from among Thus's 900 or so employees south of the border.

Thus, which had supplied telecoms and broadband networks to mainly business customers, began life in 1994 as Scottish Telecom, an offshoot of ScottishPower.

In 1999, Thus was floated on the London Stock Exchange, but while it built cutting-edge telecoms systems, its performance for shareholders was lacklustre.

The idea behind the integration of the companies is for Thus to re-focus on mid-market enterprises - typically customers with between 50 and 500 staff - and move the Scottish company's larger clients into the main body of C&W's EAUS business, and in the process drive hefty business efficiencies.

At the same time, the business will use C&W networks and take advantage of Thus's state-of-the-art telecoms technology.

The C&W spokesman yesterday said the integration of Thus into Europe, Asia & US was "progressing well", and that it would deliver earnings before interest, tax, depreciation, and amortisation (Ebitda) for Thus of £23m and cost savings of £7m in the six months to the end of March 2009, as well as around £2m per year in the future.

Meanwhile, the telecoms giant has also drafted in Jesper Lauridsen, the former director of international sales at C&W's EAUS, as the new managing director of Thus, replacing the company's former chief executive Bill Allan, who left shortly after the takeover.

In its interim management statement to the London Stock Exchange yesterday, C&W also said its two businesses were "very much" in line with expectations and that it was on track to achieve group Ebitda of at least £80m for its 2009 financial year.

The company operates through two standalone business units, Europe, Asia & US and international.

It also said that earnings and profits were bolstered by the recent weakening of the pound against the dollar because it has a high proportion of income denominated in the US currency.

Meanwhile, C&W noted that progress has been maintained in the Europe, Asia & US unit, as signified by the winning of significant new business and improving market share, as well as contract renewals with major customers.

It also said it procured a five-year, £79m contract to supply telecoms for British Gas and Scottish Gas-owner Centrica, and also cited supermarket chain Wm Morrison and Lloyds TSB Asset Finance as recent contract wins.

Internationally, the company said it had gained from its wide spread and that it had seen resilient trading, especially in Panama, as well as "Monaco & Islands and Macau", with the latter region performing broadly in line with its expectations.

Last November, C&W put the demerger of its international and UK businesses on hold because of turbulent market conditions.

There was no mention in yesterday's statement of the demerger plan.

Meanwhile, the restructuring programme in the Caribbean was under way and that early results were encouraging, the company added.

Shares in C&W yesterday fell 7.8%, or 12.75p, to 151p.