MCI Worldcom today would not comment on a published report that it would lay off as many as 3,750 workers in a bid to trim billions of dollars in expenses, as first reported by Network World in the December 7 issue.
The reduction could represent between 3% and 5% of the workforce and could be announced this week, the Wall Street Journal reported today.
An MCI Worldcom spokeswoman said the company has previously announced it was examining its workforce for redundancies but declined to comment on the Journal's figure or to say when it would finish its review process.
"We are deeply involved in the process now and it would be inappropriate for me to comment on when we think it would conclude," said Jamie DePeau of MCI.
Bernard Ebbers, the telco's CEO, is moving to cut expenses just three months after the $37 billion merger of WorldCom and MCI was finalized, the Journal report said. Ebbers had promised investors that the company would cut $2.5 billion in 1999, mostly through combining the MCI and WorldCom networks.
In addition to slashing the payroll, the telco will reduce overhead costs, including executive perks and travel expenses, according to the story, which cited unnamed executives. At 30% of its revenue, MCI's overhead was substantially higher than the leaner WorldCom's, which was only 18%.
The news came as no surprise to union officials in Britain who lobbied against the MCI WorldCom merger, just as it had argued against the scuttled MCI merger with British Telecommunications "It's precisely what we warned people against when there was talk of the MCI/BT link up," said Chris Proctor, an official for the Communications Workers Union in Britain, which represents workers at BT.
"We believed that MCI WorldCom would seek to dominate workers the way they are attempting to dominate the market," Proctor said.
The union, which testified before the European Commission that the merger would be bad for competition and bad for workers, feels vindicated by the news.
"This is absolutely not a surprise to me. That's why we gave evidence in May objecting to the MCI/WorldCom merger," Proctor said.
(Rebecca Sykes in Boston contributed to this story.)
RELATED LINKS
Network World, 12/7/98
It's official: MCI WorldCom is one
Network World, 09/21/98
Justice Department approves MCI/WorldCom deal
Network World, 7/16/98
