By John Porretto
AP Business Writer
JACKSON, Miss. — WorldCom Inc., the nation's second-largest provider of long distance service, yesterday laid off about 6,000 U.S. employees, or roughly 7 percent of its worldwide work force, as part of a restructuring announced last year, a company source said.
Nearly every segment of the company was affected, according to a company source who spoke on condition of anonymity.
WorldCom officials did not deny the report, but said they had no comment.
The layoffs mark just the second time in the Clinton, Miss.-based company's history it has let workers go.
"This is part of the corporate realignment announced late last year,'' the source said. "Every position was carefully considered.''
Analysts said they were not surprised that WorldCom reduced its staff, though the cuts were not as large as some had been anticipating.
In November, WorldCom announced plans to create a new tracking stock to separate its healthy business units from those that have floundered because of increasing competition among long-distance and wireless phone companies, which operate under the brand MCI.
WorldCom, like AT&T and Sprint, has been battered by long-distance price wars and new competition from wireless phones and technology that enable calls to be placed over the Internet.
WorldCom has an international work force of 90,000, which includes part-time and contract workers.
There were reports last month that WorldCom was considering laying off as many as 11,000 employees, but Stephen Shook, a telecom analyst with Wachovia Securities in Charlotte, said Wednesday it seemed unlikely the company would further reduce staff.
"They're doing now what they view is right to position themselves for the coming spinoff,'' Shook said. "It doesn't mean there won't be another lay off, but I don't see why they would drag it out'' if more cuts were planned.
Earlier this year the provider of long-distance and Internet service posted fourth quarter earnings of $726 million, or 25 cents a share, in the October-December period, compared with $1.3 billion, or 44 cents a share, in the same period a year ago.
That was in line with analyst forecasts who revised their estimates in November after WorldCom said it would restructure its operations and issue the separate tracking stock for its long-distance services.
Ramkrishna Kasargod, an analyst with Morgan Keegan & Co. Inc. in Memphis, said WorldCom seemed intent on reshaping its business, so the layoffs were not a complete surprise.
"I think it's fair to say that the company is clearly getting focused on reducing its cost structure in light of the current difficult environment in telecommunications,'' Kasargod said.
The source did not have a breakdown of layoffs by operating units, but about 150 of the cuts took place at WorldCom's SkyTel offices in Jackson.
SkyTel is a WorldCom subsidiary that provides wireless technology and services to businesses and consumers. The two companies agreed to merge in September 1999.
In late trading on the Nasdaq stock market, shares of WorldCom fell 63 cents to $16.63.
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