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360networks cuts 44 percent of work force

The telecom services carrier announces that it will lay off about 800 employees, or 44 percent of its work force, in a move to contain costs.

    Telecom services carrier 360networks announced Wednesday that it will lay off about 800 employees, or 44 percent of its work force, in a move to contain costs.

    "This was an extremely difficult decision, but necessary in light of the very challenging telecom environment and our need to operate as cost-efficiently as possible," said CEO Greg Maffei of 360networks.

    The news follows the Vancouver, Canada-based company's announcement on June 15 that it would not make a scheduled $10.9 million interest payment to bondholders on $2.5 billion of debt.

    Company spokeswoman Michelle Gagn? said that half the cuts will come from operations in the United States, while 130 full-time and 100 contract workers will be let go in Canada. The remaining layoffs will come from businesses in Europe, South America and Asia, leaving about 1,000 employees who will continue with the company.

    Maffei is the former Microsoft chief financial officer who left behind roughly $64 million worth of stock options in 1999 to join the communications industry at its height.

    The company raised and spent billions in the past few years to build a worldwide telecom network and now faces a credit crunch due to the downturn in the stock market.

    The company announced a first-quarter net loss of $106 million compared with $45 million for the year-ago quarter. The company also said it would reduce capital spending by between $1 billion and $2.4 billion.

    Gagn? expects 360networks to announce results for the second quarter ending June 30 sometime in early August.