STRUGGLING fibre-optics company Bookham Technology says its cost-cutting drive is paying off, despite cutting 25 jobs in Swindon.

The group laid off nine per cent of its workforce earlier this month following a wave of job cuts last year as it battled the economic slowdown.

This included the news that it was closing its Swindon distribution site, a £2 million purpose-built manufacturing operation built just two years ago, with the loss of 25 jobs.

Chief executive, Giorgio Anania, said losses in the second quarter were 43 per cent below the same period a year ago at £13.7 million.

And while revenues for the six months to June 30 were down 20 per cent, pre-tax losses for the half-year were £33.2 million, £23.2 million less than last year.

Mr Anania said Bookham was now on course to hit its target of bringing cash burn down to between £10 million and £12 million in the fourth quarter.

He added that revenues were set to show a "modest improvement" in the coming months despite the challenging market conditions.

Revenues in the second quarter were 27 per cent ahead on the first three months at £7.1 million with Marconi accounting for over half the group's sales.

Marconi has agreed to buy products from the optical components arm it sold to Bookham last December but the group has also sold more non-telecom products.

Aerospace and defence equipment group BAE Systems accounted for 18 per cent of second quarter sales, buying fibre optics for lasers and modulators.

Mr Anania said: "We believe we have just completed another good quarter, with revenues up, cash burn down and further designs announced.

"The market will be down in the second half but we expect to be further up and this is a time for market share gains."

Bookham's production is now centred at two plants near its base in Abingdon in Oxfordshire and recent cuts will bring its workforce down to 750.