Executives at embattled WorldCom Inc. today held a teleconference in which they proposed to sell off more than US$1 billion in assets during the next six months as part of a corporate turnaround plan.
Through the liquidation of real estate and various international business holdings, WorldCom President and CEO John Sidgmore said he hopes "to make the company less complex." A full turnaround plan won't be divulged until sometime in June, but Sidgmore said that Clinton, Miss.-based WorldCom's Internet data operations and its IP virtual private network offerings would be central to that strategy.
"Ultimately we need to prove we can take this company into a growth position again," he said. "That may not happen in the real near term. It's nuclear winter in the telecom industry right now. It really is."
WorldCom's stock price has dropped from $18.25 a year ago to $1.81 at the start of today's trading. Sidgmore replaced longtime CEO Bernard Ebbers on April 30, less than a month after the company eliminated 3,700 jobs, 6 percent, of its workforce.
Sidgmore gave no indication as to whether further layoffs would be coming. Yet WorldCom executives did indicate higher prices for voice and data might be in the offing.
Chief Operating Officer Ron Beaumont said that charges of $100 per megabit for data center IP connections were "below cost" prices. He added that WorldCom would encourage customers to sign shorter-term contracts in order to give the company flexibility in its pricing structure.
Responding to the notion that WorldCom's financial troubles might cause it to chop customer service budgets, Chief Financial Officer Scott Sullivan vowed that "recent changes in our stock price and credit rating do not affect WorldCom's ability to serve our customers."
Ultimately, whatever formal plan emerges, the company sounds as if it plans to take an IT-centric approach to its business.
Sidgmore touted WorldCom as having "the largest Internet backbone in the world," something he said would help the company compete in international markets and court enterprise business.
"IP VPNs are the wave of the future," said Beaumont. "They're growing at a phenomenal rate."