WorldCom to axe 2,000 jobs in Europe
Posted by configure on 17 September 2002 - 10:13 · no comments & 116 views
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A new business plan has been developed for the EMEA arm of WorldCom, headquartered in Reading, England. In addition to cutting about 25 percent of its 8,300 jobs, the business will make minimal new infrastructure investments and focus on voice, data and Internet services, WorldCom said in a statement. The bulk of the 8,300 people work in England, WorldCom said.
The international arm of WorldCom also secured funding from its parent until it becomes cash flow positive sometime in 2003, the company said. The funding should ease customer concerns and end speculation of a sale of the EMEA business, WorldCom spokeswoman Rachel Richards said.
"The funding is very comforting for the European operation," she said, adding that the company is not seeing "any significant customer loss" in Europe and is in fact adding new customers.
Richards could not specify the "unprofitable niche products" WorldCom will discontinue, but stressed that the restructuring does not mean WorldCom will pull out of any geographic region it currently offers services in.
WorldCom of Clinton, Mississippi, filed for Chapter 11 bankruptcy protection in the U.S. in July. The company in June revealed that it had accounted improperly for billions of dollars in revenue. Several of its former executives have since then been indicted on securities fraud and other charges. On Friday, it disclosed plans to hunt for a chief executive officer (CEO) to replace John Sidgmore, who was named president and CEO in April.
Microsoft's plan, known as Licensing 6, has faced stiff resistance because it could as much as double volume-licensing fees, according to research firm Gartner. A number of the company's competitors have been tapping into this dissatisfaction as well as frustrations about the cost of Microsoft software, to lure customers to Linux-based systems and rival business software.
In August, Hewlett-Packard said it would boot a Microsoft software package from its Pavilion line of consumer PCs in favor of software from Corel, a less-expensive alternative. Several foreign governments, wary of depending too heavily on Microsoft, have also begun to experiment with Linux-based software.
Microsoft on Monday downplayed the significance of Novell's advertising campaign.
"I haven't seen the full-page ads they are taking out, so I can't really comment. But we aren't focused on PR efforts from our competitors. We want to make sure we stay focused on giving customers the tools and programs they need to help their businesses succeed," said Microsoft spokesman Dan Leach.
Separately on Monday, in a quarterly filing with the Securities and Exchange Commission, Novell took aim at Microsoft on the antitrust front. This comes as a federal judge prepares to make a decision about Microsoft's proposed settlement with the Justice Department and a related case in which several states are seeking harsher sanctions.
In the filing, Novell accused Microsoft of "exploiting its desktop operating monopoly in a way that is designed to extend its market power into the market for server operating systems, and to claim control of network and Web services such as authentication, using many of the same anti-competitive practices found by the United States District Court to be in violation of the nation's antitrust laws."