MCI cuts 7,500 more jobs

As its revenue continues to slip, MCI is set to lay off another 7,500 employees by next month, a purge that would bring the company’s total job cuts to 34,500 – almost half the workforce – in just less than two years.

As its revenue continues to slip, MCI is set to lay off another 7,500 employees by next month, a purge that would bring the company’s total job cuts to 34,500 – almost half the workforce – in just less than two years.

MCI often cites customer loyalty and its reputation for network reliability and service as its strengths. Despite the massive layoffs and a recent emergence from bankruptcy, company officials insist that hasn’t and won’t change.

“We raised service quality in every measure we have . . . and I think that’s a real tribute to the employees,” MCI CEO Michael Capellas said last week in a speech at NetWorld+Interop. MCI still has customers in 65% of Fortune 500 companies, he said.

But if the employees are to thank for this success, their departure might affect customer quality. In 2002 MCI employed about 77,000 people, which was in line with competitors AT&T and Sprint, which employed 71,000 and 75,000 respectively.

AT&T expects to end 2004 with about 57,000 employees, down 14,000. Sprint’s employees will be down to 64,200 this year, although a spokesman says Sprint likely will add jobs by year-end.

“Up until now there hasn’t been a material change in the way people feel about MCI,” says David Rohde, a senior analyst at TechCaliber Consulting, which helps corporate users.

MCI started cutting employees soon after it filed for Chapter 11 bankruptcy protection and the company hasn’t stopped. But Capellas says users will not suffer in this process.

“Customer service is a No. 1 priority,” he says. “We have been very careful to put automated tools in, we have been very careful on what we’ve done on customer service.”

Despite MCI’s assertions, customers need to be careful. “Users should, in particular, be keeping MCI on a short leash,” Rohde says. During the RFP process, users should look at adding wording to their contract that specifically says “who is serving your network and whether or not you can be shuttled to a program that has an anonymous 800 number,” he says.

Despite all the layoffs, according to a J.D. Powers and Associates report of more than 4,000 business users, MCI has maintained the same or slightly higher customer satisfaction levels from 2002 to 2003. The firm asked users questions ranging from network performance, reliability, their sales representatives, service costs, billing procedures and customer service. MCI’s customer satisfaction rating remains on par with AT&T’s and Sprint’s.