MCI to axe 7,500 jobs
Blames 'adverse industry environment'
MCI - formerly known as WorldCom - is to axe 7,500 jobs as it struggles to make its way in an "adverse industry environment". This latest round of job losses comes just six weeks after the global communications outfit revealed plans to erase 4,000 jobs from its operation.
News of the job losses came as the company reported its first quarter (Q1) results - the first since it emerged from Chapter 11 bankruptcy protection last month after spending the last two years clearing up the mess left behind from a damaging accounting scandal.
MCI's revenue during the first three months of the year fell to $6.3bn (£3.6bn) compared to $7.2bn (£4bn) a year earlier. The company also ran up an operating loss of $205m (£116m) for the first quarter, compared to an operating profit of $634m (£359m) during the same period last year. It made a net loss of $388m (£220m) in Q1 '04, compared to net income of $52m (£29m) in 2003.
MCI blamed this loss on declining revenue, "caused in part by industry pricing", which reflected the "adverse industry environment, as excess capacity and new technology adoption continue to pressure pricing". The job cuts earmarked for the next three months are just one way MCI reckons it can cut costs and return to profitability in the second half of the year.
Said boss Michael Capellas: "Although we made significant strides in restructuring the company during the past year, overall industry conditions and an unfavorable regulatory environment affected our first quarter results. In response we are accelerating our cost reduction program, ramping new product introductions and optimizing our network wherever possible." ®