"It has nothing to do with the sale of the Caudwell Group" said a spokesman. "If the sale process was not going ahead we would have had to embark on this recovery process anyway. Any business that has been haemorrhaging money has to go into recovery mode. It has to return to profitability. The business was badly managed in the past and we are now in the process of recovering it."
The Caudwell Group said that underperforming staff will lose their jobs. Reports last week claimed that many workers had walked out already and that morale was low. The 4U Business call centre in Warrington is being shut down.
Staff that have consistently hit targets will be offered similar posts at the firm´s head office in Stoke-on-Trent transferred to local sales roles at Phones 4U or moved to new roles elsewhere in the group. More regional sales offices are expected to close. 4U Business IT legal finance audit and marketing teams will be integrated into Phones 4U.
A Caudwell Group statement said: "Over the past 12 months 4U Business has consistently underperformed predominantly due to lack of management discipline. At the same time the small business market has become increasingly competitive.
"Losses are now so significant that urgent action needs to be taken to restore 4U Business back to profitability. As a result certain departments will be integrated into Phones 4U to gain economies of scale."

The move follows the company´s appointment as a 5 Network distributor in April and a corporate restructure that recruited executives to handle fixed-line voice and broadband accounts.
"We can now offer our customers a diversity of products" he said.

"Having loved the challenge of growing a partner channel and shifting the mix from voice towards data at Cable and Wireless I was keen to replicate my success in the mobile world" said Mukherjee.
He added that his top priority was to make the most of the "huge opportunity" that wireless data presented to the Yes Business Partner and IT reseller community.
"I firmly believe that our future is not just in sales´" added Mukherjee. "It´s essential to deepen our relationships with those partners who share our vision and develop joint initiatives and propositions that add value to the customer."

The third annual Mobile Industry Customer Satisfaction (MICS) survey of over 3000 people puts O2 at the top both as a mobile phone network and retailer. But 3 suffered from tariff changes with customers reacting negatively to the curtailing of big discounts at the end of last year.
Aura senior account manager Roberto Batistoni said: "The crazy deals it gave away were not sustainable. It´s going to take some time for customers to get used to fewer deals from 3."
A 3 spokeswoman rebutted Aura´s findings. She said: "Any survey where 3 scores poorly for value must be flawed and lacks credibility in our opinion. 3 has forced competition into the UK market. Thanks to 3 UK mobile consumers enjoy on average 40 per cent better value than before we entered the market."
Phones 4U also came in last out of seven retailers down from fifth two years ago. The retailer was criticised for over-selling to customers.
"It rated poorly by people who felt too pressured for a sale" said Batistoni.
Phones 4U CEO Tim Whiting was also surprised and dismayed by the findings. He said: All other internal and external surveys continue to show we´ve made significant progress in this area."
See feature page 22

"Our poorest performing tariff this month has been the Orange Animal tariff" said Hugh Symons business manager Bob Sweetlove. "It just can´t compete with T-Mobile´s Flext 35 or 3´s VTT 1100."
Fone Logistics head of marketing Julian Parven agreed: "Orange has been struggling and it doesn´t appear in our top 10 this month. I think it´s because so many other tariffs are really strong at the moment."
Avenir marketing manager Andy Chilton noted: "Flext 35 is still leading the way as this is a good offering to both dealer and consumer alike. However we suspect this may change next month when Orange start to increase commissions."
And Nokia continued to dominate handset sales throughout May. Bob Sweetlove said: "The Nokia 6280 continues to sell well as it a good reliable handset." And Andy Chilton commented: "Getting hold of the 6280 really is down to availability. With the options that customers have at the moment this really is the best seller."

Last week Orange parent company France Telecom pulled together its mobile fixed-line and broadband businesses under the Orange brand.
Orange started taking pre-orders for Orange Broadband last week through its network of 300 stores as well as its web and telesales operations. It will start to connect customers from June 14. Connections go live two weeks later.
There are no plans yet to offer broadband services to customers via independent dealers. Orange director of convergence Nigel Hall said: "We will not rule it out indefinitely but at the moment there are no plans."
But the re-branding exercise has given Orange a brand new presence in independent retailers such as Argos Woolworths and Texaco which have sold Wanadoo until now.
Orange is extending its TRY initiative to these retailers giving customers a free 30-day trial of its £14.99 Orange Broadband starter package with access speeds of up to 1Mbit.
Customers who buy direct and sign up to a tariff worth more than £30 a month can opt in to a free broadband package worth £17.99 a month. It allows speeds of up to 8Mbit and includes free connection a free modem/router and free off-peak VoIP calls to UK landlines. For an extra £6 it covers all calls to landlines and other Orange mobiles.
Orange Business Services is the new name for all France Telecom´s business communications services which unites Equant Etrali and Orange´s own corporate sales.
Orange has also started to sell its Orange Landline for Business which provides business customers with a single customer service point and charges up to 20 per cent less than BT the network claims.
Orange also said that it would soon launch One Phone a service that lets customers use the same handset for both fixed and mobile calls via an Orange Livebox router.
"This logic is sound enough for the consumer and SME segments of the market but what about the corporates?" said Mike Cansfield head of telecoms strategy at analyst Ovum.
"Stability is highly prized in this segment corporates all remember the industry´s near meltdown of a few years ago. So changing brands is risky."

The record losses came as Vodafone announced the culling of up to 400 staff from its Newbury headquarters as part of a cost-cutting strategy.
Fone Logistics head of marketing Julian Parven said: "Vodafone needs to look at where it is spending money and getting no return. For a long time I´ve thought that indirect channels and Vodafone consumers don´t sit well together. It needs to move away from gaining consumers via indirect channels and focus on acquiring more businesses that way."
Hugh Symons business manager Bob Sweetlove added: "We have direct dealer retailers servicing consumers buying from the business part of the network which doesn´t fit. You also have distributors capable of generating a good mix of consumer and business connections only able to access good business rates."
Vodafone chief executive Arun Sarin has attempted to answer his critics through a make-or-break strategy focusing on cost-cutting and offering broadband services.
Avenir Telecom managing director Tanny Price said: "We would hope that the proposed broadband/voice offerings would be made available to the independent dealer channel. The key to prosperity in the current climate is flexibility."
Parven agreed. "Vodafone needs to focus on offering broadband and VoIP but it needs to make sure it is easy for the consumer to use and have all payments on one bill. That is where it can start to pull back some of their losses" he said.

Dunn is chairman and chief executive of Capita Group division BDML Connect. He is also non-executive chairman of the insurance services division of Capita.
Supercover MD Russell Park said: "Dunn´s considerable experience and knowledge of the insurance industry will be extremely beneficial in the realisation of our business objective to be the specialist insurer of choice to the independent dealers for all mobile electronic consumables in the UK."

Monthly pricing models include unlimited access to the Orange photo album unlimited free data network uploads and 30 free MMS messages for £4 a month.
Orange head of multimedia marketing Rob Bramble said: "It is working particularly well on the Nokia N80 where the application is in-built. With this service we are encouraging people to use their camera as a primary device."
Users can upload their images to the album and then send them on to friends or print them off.
"We´ve made it very simple for the user" claimed Bramble. "As soon as they take a picture they just choose to send save or do neither."
The standard album comes with 200MB of space enough for 1000 medium-resolution photos. Photos can also be processed and delivered.

EasyMobile sales and marketing director Mike Lewis said: "While most of our target consumers want just simple voice and text we´re a predominately Internet-based brand and some of our more technology-savvy customers want a better experience with faster transfer speeds when using their mobile."
The announcement follows the company´s move from a purely online operator to a high street retail provider. EasyMobile is trialling the sale of handsets through easyInternet cafes in two central London stores.
Lewis claimed that the move was about expanding the brand´s opportunities rather than diluting the company´s unique online proposition.
"We have introduced this service with a simple pricing structure to meet their needs this underpins our commitment to offer great value and great service" he said.