Telecom giant WorldCom , its battered stock down to $1.45
from a 52-week high of almost $19, is reportedly considering massive job
cuts, perhaps as many as 16,000 people or 20 percent of its workforce, according to USA Today, which broke the story.
Many of the job cuts, which would also include contract employees, are likely
to come from network operations, according to the USA Today story.
The company itself, the No. 2 U.S. telecom, was declining comment. “We’re
certainly going to right-size the business, but to speculate on details of
that would be premature,” spokesman Brad Burns was quoted as saying in USA Today.
WorldCom, which is laboring under a $30
billion debt load (much of it already reduced to “junk” status by the
financial markets), already has cut 12,700 jobs over the past two years and
seen its stock fall from a high of more than $64 in mid-1999.
The company’s top management is still finalizing the cuts, which could be
sent to the board of directors for approval within weeks, sources in the
company were quoted as saying, USA Today said.
WorldCom Group, as an integrated business of Worldcom Inc., provides
communications services including data, Internet-related, commercial voice
and international services. Its operations include an IP backbone system
(UUNET) that spans six continents. The company gained a controlling stake in
managed hosting provider Digex by buying Intermedia in 2001.
Another tracking stock, MCI Group , represents WorldCom’s
consumer long-distance business.
For the quarter ending March 31 of this year, WorldCom revenues fell 2
percent to $5.08 billion. Net income fell 65 percent to $184 million.
WorldCom recently obtained $1.5 billion in new financing and this month it
expects to secure a $5 billion credit line in moves aimed at easing investor
fears that the company may slip into bankruptcy as revenue from long-distance
and data services continues to fall.
Clinton, Miss.-based WorldCom is also mulling the sale of its wireless and
Latin American units, USA Today said.
Massive Job Cuts at WorldCom?
