After adjusting its earnings expectations for the quarter, Qwest Communications International announced today it will cut 7,000 jobs by June.
"The new guidance reflects continued economic softness both nationally and within the 14 Western states in which Qwest provides local communications services as well as a decrease in demand for wholesale broadband capacity services," the company said in the announcement.
Denver-based Qwest has 62,000 employees now; the cuts would will bring that workforce down to 55,000. But the company insisted that there would be no disruption of service to its local telephone and broadband customers in the 14 states where it operates.
Steve Hammack, a Qwest spokesman, said he is unsure exactly where the cuts will fall.
"Right now, we don't know," Hammack said. "We haven't identified specific areas of the business where the cuts will take place." He did said the company has decided to cut 4,000 to 5,000 operational employees and 2,000 to 3,000 management employees.
Shares of the company have dropped this morning following the earnings announcement.
The cuts will come, "through attrition and continued business process improvements," the earnings announcement said. Qwest officials said they expect a net loss for the year of US$2.30 to $2.38 per share, or $20 million to $20.7 million. For 2002, Qwest expects earnings of 17 cents to 24 cents per share, or about $1.5 million to $2.4 million.
Revenue for the quarter was reported at $4.8 billion.
The company also said it would take a charge against fourth-quarter earnings of $400 million to $600 million, primarily for severance costs and minor asset write-downs.