This version corrects an inaccurate report that was originally published on June 5, 2002.
WorldCom Inc.’s wireless resale division is hitting the scrap
pile, officials announced Wednesday, potentially putting more than 2,000 out of work as
the carrier desperately struggles to get back to the basics.
The announcement comes after a day-long swirl of job-cutting rumors
surrounded the company.
“Some” of its workforce would be let go immediately, officials said, while
the rest continued operations for existing wireless customers throughout
the U.S. during the “multi-month process.”
WorldCom officials said they have several interested buyers, though
officials were unavailable to comment on the likely suitors, and will
decide on the best option before finalizing an exit strategy.
It’s the second round of cuts at WorldCom in two
months, an indication executives see the
need for further trimming.
John Sidgmore, WorldCom president and chief executive officer, said the
exit would strengthen the remaining division’s cash position.
“After carefully assessing our business and the current market conditions
for wireless resale services, we have decided to exit the wireless resale
business — a business that is not a core WorldCom asset,” he said.
Executives attribute intense pricing, cash requirements and slow market
growth for the departure.
Sidgmore took the reins at WorldCom from departing co-founder Bernard
Ebbers, who was presumably forced out
of his position by board directors after a Securities & Exchange
Commission (SEC) probe exacerbated already-plummeting stock prices.
To Sidgmore fell the unenviable task of determining which units in the
WorldCom-MCI empire needed trimming. By going back to the basics, the
“core WorldCom assets,” he obviously feels the phone division (MCI) is
bringing the company the biggest sustained revenues.
