| Bankrupt telephone company WorldCom Inc. said Monday it would cut 5,000 jobs, or more than 8 percent of its work force, and trim annual costs by $2.5 billion in an effort to emerge from bankruptcy.
WorldCom , which filed for the world's largest bankruptcy in July amid a $9 billion accounting scandal, said it would cut line costs by 12.5 percent, and sales, general and administrative (SG&A) expenses by 13 percent.
The company, which has 60,000 employees, said the job cuts mainly involve its corporate and administrative staff, and will exclude its sales staff, and operations and technology functions, it said.
WorldCom, the No. 2 U.S. long-distance telephone and data services company, said it would pare line costs through network integration and efficiencies, improved technologies, and the renegotiation of more than 2,600 supplier contracts. It also will consolidate offices and reduce its total facility consolidation 8.7 million square feet.
The Clinton, Mississippi-based company also aimed to boost sales to small and mid-sized businesses, expand into more local telephone markets, and change its calling plans to try to strengthen revenues. It planned to boost sales to corporations by broadening its network integration and consulting services.
Analysts also expect the company to eventually shed assets such as its Latin American operations, and outsource more technical operations to save money.
The company has said it would release its three-year business plan by March 1. It must file a reorganization plan with the bankruptcy court by April 15.
WorldCom's sales fell to $2.2 billion in November, from $2.3 billion in October, marking the steepest drop since the company began reporting monthly results in July. Its net loss from continuing operations narrowed to $194 million from $234 million.
Earlier this week, WorldCom said it may take a charge of nearly $32 billion to write down the value of its plants and equipment. It previously said it may take a charge of up to $50 billion to write down the value of goodwill and other intangible assets. | |
