WorldCom Inc. may cut 16,000 jobs, or about 20 per cent of its workforce, in an effort to turn around the ailing company, according to a report in the online edition of USA Today published Tuesday.
Details of the cuts are still being finalized by top management at the Clinton, Mississippi, telecommunications company, though a proposal could go to the board of directors within weeks, USA Today reported, citing executives familiar with the plans. Many of the cuts are expected to come from network operations, according to the report.
A WorldCom spokeswoman in Europe declined to comment on the “rumour and speculation” about job cuts. WorldCom officials in the U.S. were not immediately available to comment.
WorldCom pared 9,000 jobs last year and in April said it would eliminate another 3,700 positions. Further cuts would be one of the measures taken by John Sidgmore, who took over as chief executive from Bernard Ebbers, who resigned April 30, to win back confidence from Wall Street.
Sidgmore, in a conference call with industry analysts and media last week, stated that he wants to make the company “less complex and more efficient.” He did not mention job cuts, but did say that WorldCom would present a restructuring plan within weeks. The company’s annual meeting of shareholders is scheduled for June 14.
Asset sales, to raise between US$1 billion and $1.5 billion in the next few months, will be a part of the plan, Sidgmore said. WorldCom wants to sell its loss-making wireless business “as fast as possible” and is also looking to divest some “non-strategic” assets in Mexico and South America, as well as a network in Japan. “Significant real estate” is also for sale, Sidgmore said.
WorldCom, the second-largest long-distance phone company in the U.S., is struggling with falling revenue and approximately $29 billion in long-term debt. The company was pulled from the S&P 500 index. Its share price has tumbled and credit agencies have downgraded its debt bonds to junk status.
WorldCom is online at http://www.worldcom.com/main.phtml?grph=1&inc_img=5.
