WorldCom lets go first of 17,000 workers
By John Porretto
AP Business Writer
CLINTON, Miss. — WorldCom Inc. started laying off 17,000 workers worldwide Friday, days after disclosing a huge case of improper accounting that could force the nation's No. 2 long-distance company into bankruptcy.
The cuts account for about 20 percent of the work force at WorldCom, which operates in 65 countries.
WorldCom revealed Tuesday that its internal auditors had found that $3.8 billion was wrongly listed on its books as capital expenses in 2001 and 2002. That means WorldCom may have lost millions of dollars when it reported profits.
On Friday, WorldCom eliminated about 1,300 jobs in Virginia, 1,000 in Texas, 700 in Maryland, 500 in Colorado and 450 in Georgia. In other states, the numbers ranged from a few up to a few hundred. WorldCom's 2,000 employees in Mississippi were cut by about 100.
"I'm going to miss the friends that I have inside, and I'm worried about what they're going to do," said Kimberly Spencer, a 31-year-old mother of two who lost her job in the accounting department at WorldCom headquarters.
Spencer cried as she described the somber mood of her co-workers and said she and others were frustrated and angry.
"Unfortunately, they lied, and there's nothing we can really do at this point," said Deborah Day of Jackson, who worked in the network installation department for three years.
WorldCom's largest employment base — about 9,000 — is in the Washington, D.C., area, where MCI Communications had its headquarters and where WorldCom chief executive John Sidgmore has his office. WorldCom bought MCI in 1998 for $30 billion.
MCI, WorldCom's consumer long-distance arm, handed out pink slips Friday to about 700 workers in Maryland.
WorldCom spokesman Peter Lucht said the layoffs would take effect within six weeks to six months.
In Tulsa, WorldCom began laying off about 300 of its 2,800 employees. Workers, some in tears, toted boxes to their cars outside the sprawling office complex after learning from superiors they no longer had jobs.
Most said they were relieved to know their fate after a few sleepless nights since Tuesday's news.
"It's a relief to finally hear when you work for a company that knows but won't say anything," said Laura Evans, who was a trainer in the company's order implementation department for four years. "Whether you're staying or going, it's a relief to know."
Sidgmore had told shareholders at WorldCom's annual meeting two weeks ago that significant job reductions were planned. He didn't give a specific number, but the company pegged it at 17,000 on Tuesday as it revealed the accounting scandal.
Sidgmore, who replaced WorldCom founder Bernie Ebbers as chief executive in April, said the cutbacks would save the company $900 million a year and would be achieved through layoffs, attrition and other means.
The layoffs are the second round this year for WorldCom. In April, the company said it was eliminating 3,700 U.S. jobs.
WorldCom has seen its stock price plummet in recent months because of concerns about debt of $30 billion, $400 million in loans to Ebbers and weakness in the telecommunications industry.
President Bush has vowed to "hold people accountable" for the accounting scandal at WorldCom, and the Securities and Exchange Commission has filed fraud charges.
In a letter sent to Bush on Thursday, Sidgmore said he understood the president's outrage and that he and others on WorldCom's management team "are equally surprised and outraged."
"Part of restoring trust means being straight about problems as we discover them — and aggressively solving them. This is the only way we will rebuild our company's credibility," Sidgmore said. "You have our commitment that we will continue to do this.'
