WorldCom Gives Out About 6,000 Pink Slips

Feb 28 2001

NEW YORK - Voice and data services company WorldCom on Wednesday laid off about 6,000 workers, or about 6 to 7 percent of its global work force, in a move to cut costs ahead of its restructuring, sources close to the company said WorldCom, which plans to separate its floundering consumer and wholesale long-distance telephone operations from its data and Internet business, declined to comment Surprisingly few workers were laid off, the sources said. The Clinton, Miss.-based company had been rumored to slash up to 11,550 jobs, or 15 percent of its 77,000-person work force in the United States. WorldCom employs another 13,000 workers internationally WorldCom fired about 6,000 workers, but the exact number of layoffs was not immediately available. It was unclear whether the company would need to take a charge to cover the cost of any severance packages One source said the company cut workers in all areas of the company, rather than just in the traditional long-distance business as rumored WorldCom has been working to cut costs and refocus its business on more lucrative, and faster-growth data and Internet services. The company, which in November slashed its growth outlook through 2001, has been plagued by increased competition and pricing pressure in the long-distance market Layoffs are rare at WorldCom, the one-time Wall Street darling created by about 60 mergers over the past decade. WorldCom previously cut about 2,300 jobs in 1998 to trim expenses after its $40 billion acquisition of MCI Communications Inc Earlier this month, local telephone company Verizon Communications said it would cut 5 percent of the "equivalent headcount" in its core telephone unit's work force, or the equivalent of 10,000 employees Communications equipment makers such as JDS Uniphase , Nortel Networks , Lucent Technologies , and Motorola also have announced layoffs Under WorldCom's restructure plan, which was announced Nov. 1, WorldCom Inc. will retain its name but it will have two separately traded tracking stocks to reflect the performance of different portions of a company's operations The "WCOM" stock symbol will track the company's core data, Internet, Web hosting, corporate telephone and international businesses A second entity called "MCI" will trade under the symbol "MCIT," and will reflect the performance of the consumer, small business, wholesale long-distance, and dial-up Internet access operations. Copyright 2001, Reuters News Service