WorldCom confirms job cuts
- 04 April, 2002 07:27
WorldCom Inc. announced a 6 percent cut in its U.S. workforce Wednesday, eliminating 3,700 of its positions from its data services division.
The carrier made the cuts to better align its costs with its expectations of revenue growth in the mid-single digits, the company said in a release. Newspaper reports published Wednesday quoting sources close to WorldCom said the company would cut up to 10 percent of its workforce.
Jobs in the company's long-suffering long distance unit remain unaffected by the cut at the WorldCom Group, the company's Internet backbone and business data services division. Long-distance revenue has deteriorated steadily due to stiff competition, a weak economy and users substituting wireless and digital communications for long distance calls, WorldCom said during a February conference call regarding earnings.
WorldCom, based in Clinton, Mississippi, pared 9,000 workers last year in an attempt to deal with the economic downturn. So far this year, the telecommunication industry has announced 60,691 job cuts, according to outplacement firm Challenger, Gray & Christmas Inc. Bankrupt carrier Global Crossing Holdings Ltd. has cut 9,000 from its staff this year and Verizon Communications Inc. in March announced a reduction of 10,000 jobs for the year.
The U.S. Securities and Exchange Commission (SEC) began an investigation into WorldCom's corporate accounting practices, the company confirmed in March.
WorldCom (WCOM) shares were trading at $6.65 Wednesday afternoon. Shares closed Tuesday at $6.78.