WorldCom axes 5,000 jobs amid budget cuts
WorldCom Inc. slashed 5,000 jobs, most of them corporate and administrative positions, and laid out various other measures Monday to cut US$2.5 billion in costs as part of the 100-day plan for emerging from bankruptcy announced recently by Chairman and Chief Executive Officer Michael Capellas.
The plan will chop line costs by 12.5 percent and expenses in sales, general operations and administration by 13 percent, the company said. WorldCom aims to be out of Chapter 11 bankruptcy protection by later this year under an initiative outlined by Capellas last month. The cost-cutting steps are the first milestone in the 100-day plan, WorldCom said.
Besides the elimination of positions at the company, which is based in Clinton, Mississippi, WorldCom also announced:
-- Line cost savings of $1.5 billion mostly from network integration, improved technologies (which were not specified) and renegotiation of more than 2,500 supplier contracts.
-- Consolidation of facilities to decrease total square footage by 8.7 million square feet or 26 percent. The company will continue to have a "major" presence in Clinton; Alpharetta, Georgia; Ashburn, Virginia; Cary, North Carolina; Denver and Colorado Springs; Richardson, Texas; Tulsa, Oklahoma; Reading, U.K., and Hong Kong.
WorldCom filed the largest bankruptcy in U.S. history last July after a $9 billion accounting scandal was revealed.