Qwest Communications International Inc.
Thursday announced it would simultaneously start up a new business unit
while cutting 12,800 jobs by the end of next year in an effort to reduce
costs and reorganize its operations.
The Denver-based telecom firm said 4,500 jobs would be eliminated by the
end of this year, while another 6,500 corporate positions and 1,800
free-lance jobs will be eliminated by the end of 2001.
The downsizing comes on the heels of Qwest’s raised revenue
projections for this year and the next, as it streamlines operations fresh
from completing its $36 billion acquisition of former Baby Bell U S West in June.
Qwest bean-counters adjusted revenue forecasts upward, from $18.5 billion
to $19.1 billion for 2000. Next year’s estimates rose from $21.3 billion to
$21.7 billion, illustrating that the majority of Qwest’s reorganization
initiatives would impact its bottom line this year.
Joseph Nacchio, Qwest chairman and chief executive officer said the higher
estimates were based on its ability to execute its strategic merger plan.
Turning a blind eye to its layoffs, Qwest also debuted its new high-speed
digital media unit. The telecom company said the new business division,
dubbed Qwest Digital Media, would focus on providing customers with
high-speed storage, management, and broadband delivery of digital media
services.
Former Cox Communications
cable executive David Woodrow was tapped to lead the new unit tasked with
producing video on demand.
Qwest’s Nacchio said Woodrow was the right man for the job, having also
served on Excite@Home’s
board of directors.
“David brings seasoned judgment and leadership to a strong Qwest management
team as we ramp up delivery of digital multimedia content over our
high-speed broadband Internet network,” Nacchio said.
Woodrow said Qwest was well positioned to dominate the potential market for
digital cinema storage, projected to be worth $7 billion by 2005.
“Qwest Digital Media provides a critical component of the core
infrastructure that will assist us in delivering the promise of any movie,
any time in any language, night or day,” Woodrow said.
“The potential opportunities in digital media and IP solutions position
Qwest ideally for the next decade to deliver media rich content to users
worldwide,” Woodrow added.
Qwest, along with Cisco Systems Inc. and Twentieth Century Fox,
offered the world’s first digital screening of a major motion picture this
summer. Titan A.E. may not have made a blockbuster movie debut, but
it will go down in history as the first feature film distributed over an
Internet-based network.
Qwest stock is trading down slightly as investors digest its multiple
maneuvers streamlining one side of its operational expenses while expanding
another.
