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WorldCom CEO Ebbers resigns

Bernard Ebbers, the executive who built WorldCom into a top telecommunications company, resigns amid WorldCom's sinking stock price and a government probe of his finances.

ebbers Bernard Ebbers, the brash executive who built WorldCom from a sleepy phone company into one of the world's top telecommunications companies, has resigned, bowing to a plummeting stock price and a government probe of company support of his personal finances.

Ebbers, 60, will be succeeded by 51-year-old Vice Chairman John Sidgmore, the Clinton, Miss.-based company said in a statement. Sidgmore has taken a back-seat role for most of the past year, after having run the company's Internet arm, UUNet.

According to The Wall Street Journal, which first reported in the story, Ebbers reached his decision Friday and formally turned in his resignation on Monday.

Ebbers is one of the best-known figures in the telecom industry, having built once-tiny WorldCom into a major global player with some 80,000 employees.

But WorldCom and its long-distance rivals have suffered as business and residential customers cut spending in the weak economy. That has added to the industry's ongoing price wars, excess network capacity and intense competition.

Just two years ago, Ebbers' WorldCom was among the highest-flying companies competing in the heady telecom arena. But the costs of aggressive expansion--largely through dozens of acquisitions--and the rapid, global downturn in the telecommunications market undercut the company's growth.

Then, as the stock price--which topped out above $64 a share in 1999--continually eroded, questions began surfacing about the company's $366 million in personal loans to Ebbers, a relationship that has led to a broad investigation by the U.S. Securities and Exchange Commission.

The stock closed Monday at $2.35 on the Nasdaq, having fallen nearly 30 percent on the day. The stock has fallen more than 80 percent since January.

Story Copyright © 2002 Reuters Limited. All rights reserved.