MCI WorldCom Plans Layoffs
MCI WorldCom Inc., the newly-formed telecommunications company, plans to lay off about 1,875 workers, or 2.5 percent of its work force, as part of an effort to slash $2.5 billion in costs next year, an industry source familiar with the situation said Thursday.
MCI WorldCom chief executive Bernard Ebbers is known for moving swiftly to cut costs in newly acquired companies. MCI and WorldCom completed their $37 billion deal 3 months ago in one of the nation's largest telecommunications mergers, forming a formidable rival to AT&T Corp. and other dominant players.
The new company is the nation's second-largest long-distance provider behind AT&T after fusing No. 2-ranked MCI and the fourth largest long-distance company, WorldCom. It has 3,400 employees in Tulsa.
The Wall Street Journal reported Thursday the cuts would include as many as 3,750 layoffs, but the industry source, speaking on condition of anonymity, said the cuts would be about half that.
MCI WorldCom, based in Jackson, Miss., has said it hopes to save $2.5 billion next year, mostly by combining the MCI and WorldCom telecommunications networks but also through cuts in the 75,000-work force.
Jeffrey Kagan, an independent telecommunications analyst in Atlanta, noted that Ebbers was living up to Wall Street's expectations by slashing expenses. Shareholders, by faithfully bidding up WorldCom's stock price in anticipation of its expansion, made the all-stock deal possible.
MCI WorldCom stock was up nearly 2 percent in morning trading, rising $1.93 3/4 to $63.75 on the Nasdaq Stock Market.
Jamie Depeau, the MCI WorldCom spokeswoman based in Washington, declined to give details on any job cuts and said "all areas" of the company were being reviewed.
"From the time we announced the merger we said we would undertake a careful review of the merged organization to determine where duplication exists," she said. "We are involved in that review. It's simply premature to comment where we are."
Written By David E. Kalish