David Cohen 

WorldCom wields axe in Europe

WorldCom yesterday confirmed that about 832 employees would be made redundant by the end of the month, reports David Cohen.
  
  


WorldCom yesterday confirmed that about 832 employees would be made redundant by the end of the month.

The internet service provider employs 11,000 people across Europe - including part-time and contract staff - 5,500 of whom are based in Britain.

The redundancies will affect staff across the continent, although sources say the lion's share will be at the Cambridge and London offices.

A spokesman for WorldCom said: "The figure [of 832 redundancies] is pretty accurate, but it's not a final number - we expect to make a concrete announcement by the end of the month.

"At present we are consulting with employees to work out where best to make the cuts."

The redundancies are part of a restructuring programme at the company which aims to absorb the operations of its subsidiary UUNet into WorldCom and dispense with the facade of UUNet brand completely.

"Once the restructuring plan is complete the UUNet brand will no longer exist," said Richard Woods, director of public relations at UUNet.

The news of the redundan cies confirms speculation that began in March when WorldCom laid off 6,000 employees at its US operations - equivalent to around 7% of the company's global workforce.

Insiders say that employees have expected the cuts since January and the long wait has driven some to jump ship.

The spokesman said no union representatives operated in the company, but employees were being consulted individually to break the news where necessary.

"We want to be the first to tell them," the spokesman said.

Last week WorldCom reported net income for the first quarter of the year had fallen by 49% in comparison with the same period last year, from $1.2bn (£839m) in March 2000 to $610m.

Next week the company plans to sell an estimated $8bn worth of bonds to raise much-needed capital for investment and debt clearing.

Analysts expect a portion will be offered in euros and possibly sterling, the first time the company has raised such funds in Europe. Executives are touring the continent to raise investor interest.

Analysts said that WorldCom was likely to use part of the money to pay off debts of $3.1bn due for settlement this November.

 

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