Job cuts are on the way for 1,000 workers at mobile phone giant Orange and more than 430 people at computer services group Xansa.

Orange announced the cuts along with plans to raise its financial targets during the next three years.

The group, controlled by struggling French telecoms giant France Telecom, said the cuts would be made during the coming year.

Most losses were likely to be restricted to mainland Europe as Orange has already streamlined the bulk of its UK operations.

The group said the cuts would help accelerate its financial per-

formance and lower spending by £1.9 billion between next year and 2005.

The launch of key next generation 3G mobile phone services outside the UK would be later than expected.

Jean-Francois Pontal, who is stepping down as chief executive in April, said the group was benefiting from the scale of its business, now in 21 countries.

Orange said the successful take-up of phone services such as picture messaging was leading to higher earnings.

The group believed net cash flow between next year and 2005 would be £3.2 billion to £4.5 billion, which is above City expectations.

Orange's update came as France Telecom announced the details of a government-backed plan to resurrect its fortunes. France Telecom, weighed down by debts of £44 billion, plans to raise £9.6 billion in a share sale.

At Xansa, plans are to reduce staff numbers by ten per cent over the next four months in a move to slash costs.

The cuts come on top of staff reductions already made. The group has brought staff numbers down by 516 to 5,938 over the past year.