September 16, 2002, 8:55 AM — Struggling WorldCom Inc. will cut about 2,000 jobs in its Europe, Middle East and Africa (EMEA) unit and discontinue some niche services in a bid to make the business cash flow positive by next year, the company said Monday.
A new business plan has been developed for the EMEA arm of WorldCom, headquartered in Reading, England. In addition to cutting about 25 percent of its 8,300 jobs, the business will make minimal new infrastructure investments and focus on voice, data and Internet services, WorldCom said in a statement. The bulk of the 8,300 people work in England, WorldCom said.
The international arm of WorldCom also secured funding from its parent until it becomes cash flow positive sometime in 2003, the company said. The funding should ease customer concerns and end speculation of a sale of the EMEA business, WorldCom spokeswoman Rachel Richards said.
"The funding is very comforting for the European operation," she said, adding that the company is not seeing "any significant customer loss" in Europe and is in fact adding new customers.
Richards could not specify the "unprofitable niche products" WorldCom will discontinue, but stressed that the restructuring does not mean WorldCom will pull out of any geographic region it currently offers services in.
WorldCom of Clinton, Mississippi, filed for Chapter 11 bankruptcy protection in the U.S. in July. The company in June revealed that it had accounted improperly for billions of dollars in revenue. Several of its former executives have since then been indicted on securities fraud and other charges. On Friday, it disclosed plans to hunt for a chief executive officer (CEO) to replace John Sidgmore, who was named president and CEO in April.