MCI WorldCom won't confirm 3750 Layoffs
- 11 December, 1998 12:01
MCI Worldcom would not comment yesterday on a published report that it will lay off as many as 3750 workers in a bid to trim billions of dollars in expenses.
The reduction could represent between 3 per cent and 5 per cent of the workforce and could be announced this week, the Wall Street Journal reported.
An MCI Worldcom spokeswoman said the company has previously announced it was examining its workforce for redundancies but declined to comment on the Journal's figure or to say when it would finish its review process.
"We are deeply involved in the (review) process now and it would be inappropriate for me to comment on when we think it would conclude," said Jamie DePeau of MCI.
Bernard Ebbers, the telco's chief executive officer, is moving to cut expenses just three months after the $37 billion merger of WorldCom and MCI Telecommunications was finalised, said the Journal report. Ebbers had promised investors that the company would cut $2.5 billion in 1999, mostly through combining the MCI and WorldCom networks.
In addition to slashing the payroll, the telco will reduce overhead costs, including executive perks and travel expenses, according to the story, which cited unnamed executives. At 30 per cent of its revenue, MCI's overhead was substantially higher than the leaner WorldCom's, which was only 18 per cent.
The news came as no surprise to union officials in Britain who lobbied against the MCI WorldCom merger, just as it had argued against the scuttled MCI merger with British Telecommunications. "It's precisely what we warned people against when there was talk of the MCI/BT link up," said Chris Proctor, an official for the Communications Workers Union in Britain, which represents workers at BT.
"We believed that MCI WorldCom would seek to dominate workers the way they are attempting to dominate the market," said Proctor.
The union, which testified before the European Commission that the merger would be bad for competition and bad for workers, feels vindicated by the news.
"This is absolutely not a surprise to me. That's why we gave evidence in May objecting to the MCI/WorldCom merger," Proctor said.