Qwest to cut 11,000 jobs

Just two months after its US$43.5 billion acquisition of US West Inc., Qwest Communications International Inc. in Denver said today that it will cut 11,000 of the combined companies’ 71,000 jobs by the end of next year.

In a statement today, the company said 4,500 jobs will be cut by the end of December, and an additional 6,500 will be eliminated by the end of next year. Qwest will also cut 1,800 contractor positions by the end of 2001.

The cuts come as Qwest moves from being a regulated telecommunications business to one focused more on broadband, wireless, Internet and bundled services, according to Qwest chairman and CEO Joseph Nacchio.

The layoffs – which Nacchio said will eliminate duplicate jobs and won’t affect customer service – weren’t unexpected. After its June 30 merger with U.S. West, Nacchio indicated that job cuts were imminent.

“We are successfully blending the business and cultures to further Qwest’s position as an entrepreneurial, large-cap growth company,” he said in today’s statement. “We are relentlessly pursuing growth and uncovering new areas of customer demand, while maintaining our vision and direction.”

Nacchio said that this year, Qwest expects revenue to reach $18.8 billion to $19.1 billion, up from the company’s original projection of $18.5 billion. For next year, the company is projecting revenue of $21.3 billion to $21.7 billion, exceeding its previous forecast of $21 billion.

Qwest said that over the next year, it plans to complete the previously announced sale of 570,000 access lines in its 14-state region, but will continue to own and operate more than 17 million telephone lines.

In addition, Qwest said, it expects to have 1.6 million wireless customers by the end of next year.

Carl Garland, an analyst at Current Analysis Inc. in Sterling, Va., said he believed the job cuts were focused on the U.S. West part of the business.

“It reflects, to some extent, the fact that Nacchio realizes that U.S. West was a large, bloated business,” Garland said. “So part of this move is to make U.S. West more in line with the way Qwest has been run – like a lean, aggressive competitor.”