MCI WorldCom, the recently merged telecommunications company, will notify about 2,000 employees today that their jobs will be eliminated, a company spokeswoman confirmed.
The second-largest phone company behind AT&T will cut nearly 3 percent of its workforce in an effort to slash $2.5 billion in expenses in 1999, spokeswoman Jamie DePeau said.
The cutbacks will primarily hit network operations, information technology, and engineering positions, and take place at dozens of locations across the country.
MCI WorldCom's Richardson, Texas, office will shed about 300 jobs; Carey, North Carolina, will drop about 150, and Tulsa, Oklahoma, will lose about 120 jobs. None of the facilities will be closed down completely and none will be cut by more than 300 positions, DePeau said.
"The impacted employees will be notified today that their jobs will be eliminated by the end of the year," said DePeau. "They will be given severance packages and medical coverage through the severance period."
Industry analysts agreed that MCI had become somewhat bloated and expected a reduction in expenses, as promised by MCI WorldCom chief executive Bernard Ebbers. Some analysts were surprised at how quickly he moved to reduce expenses.
Still, the cuts were necessary, most analysts agreed, noting that when two similar companies merge, there is bound to be some overlap.
"This is how you get some cost savings," said Phil Wohl, a telecommunications analyst at S&P Equity Group. "But since it came even quicker than expected, it will be even better for the company moving forward."
AT&T has cut 15,000 positions this year so far and will shave another 3,000 by the end of the year. When chief executive C. Michael Armstrong joined the company, he also moved quickly to cut the extra overhead that had turned the once-overpowering telco leader into a struggling behemoth.
On Tuesday, the market value of MCI WorldCom briefly jumped higher than that of AT&T--the company once reverently called Ma Bell, from which nearly all regional phone companies were spun off following an antitrust trial.
Although AT&T regained the lead with its $5 billion deal with IBM, a series of converging factors have made MCI WorldCom a strong player. The merger between MCI and WorldCom gives the company an end-to-end system of local, long distance, and data networks that stretches across the globe.
MCI cut about 1,500 jobs last year as it prepared to merge with WorldCom.
MCI WorldCom stock was up .7 percent or .4375 to 63.1875 in late afternoon trading. It has traded as high as 64.63 and low as 28 during the past 52 weeks.