Commander Communications has axed 600 jobs in a last ditch effort to repay $335 million in accrued debt.

The cuts were felt mostly in the company's IT hardware and support areas including Commander's computer hardware reselling business which will be dissolved as part of a company restructure.

Most staff were only informed yesterday of the sackings, which will eliminate one third of the company's workforce.

Staff numbers have officially dropped from 2000 to 1400.

Commander Communications CEO Amanda Lacaze said the cuts will boost shareholder value.

"The core value drivers in Commander's business are sound, however, some areas of the business are underperforming or are simply unprofitable," Lacaze said.

"By taking decisive action today, I am confident we can maximize value for both customers and shareholders.

"I am saddened that it has been necessary that so many staff leave the business but in taking this action I believe we are setting a robust platform for the remaining staff and further growth."

The Workplace Ombudsman has launched an investigation into the sackings and called for fired employees to forward concerns to the office.

Commander will cough up about $17 million in redundancies and stands to save more than $65 million in reduced annual costs.

The cuts ride on the back of Commander's fourth profit fall in nine months, in which its beleaguered hardware reselling arm contributed to half of a $1 billion revenue with zero profit.

Debts were further exacerbated by failed acquisition attempts last November in which Commander hoped to lure the likes of Optus and AAPT-PowerTel into a buy out.

The company's banking syndicates have delayed the multi-million dollar debt payments by up to 12 months.

A spate of IT job cuts and shake-ups have swept the industry this year with Yahoo eliminating up to 1000 jobs in light of tight industry competition and IBM cutting the base pay-rate of 7600 technical support staff.

Commander Communications is headquartered in Sydney and sells telephony hardware and software, Internet and network access, maintenance services and software licensing.