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 per cent and expenses in sales, general operations and administration by 13 per cent, 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. [Please see Capellas outlines WorldCom’s next 100 days.]The cost-cutting steps are the first milestone in the 100-day plan, WorldCom said. While the company said the loss of jobs will primarily involve administrative and corporate positions, it did not indicate which of its offices will directly be affected.
In Canada, WorldCom has offices in Calgary, Vancouver, Toronto and Montreal.
Besides the elimination of positions at the company, which is based in Clinton, Miss., WorldCom also announced:
– Line cost savings of US$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 per cent. The company will continue to have a “major” presence in Clinton; Alpharetta, Ga.; Ashburn, Va.; Cary, N.C.; Denver and Colorado Springs, Colo.; Richardson, Tex.; Tulsa, Okla.; Reading, U.K., and Hong Kong. The company will continue to have a “significant” presence in the rest of the world.
WorldCom filed the largest bankruptcy in U.S. history last July after a US$9 billion accounting scandal was revealed.