Archive for Tuesday, September 11, 2001

Qwest to unplug 4,000 jobs

September 11, 2001


— Qwest Communications International said Monday that it was cutting 4,000 jobs, or 6 percent of its work force, and lowered its financial forecast, citing deteriorating economic conditions.

The telecommunications company said it expected 2001 revenue of $20.5 billion and earnings of about $8 billion. Qwest had forecast revenue of $21.3 to $21.7 billion for 2001.

Last year, Qwest earned $995 million on revenues of $18.95 billion.

To help offset the expected declines in revenue and income growth, Qwest said it would trim its work force from 66,000 to 62,000 by the end of the first quarter of 2002. It also will eliminate 1,000 staff positions while adding 1,000 sales executives in its global business unit.

To make the cuts, Qwest will not fill open positions and will continue streamlining operations, Qwest spokesman Tyler Gronbach said.

Qwest Chairman and Chief Executive Officer Joe Nacchio cited declining economic conditions including high unemployment, slow growth in the gross domestic product and other indicators prompted the cuts.

In trading Monday, Qwest shares closed up $1.76, or 9.7 percent, to $19.90 on the New York Stock Exchange. Analyst David Bench of Arnhold & S. Bleichroeder in New York called it bargain hunting.

"It's just a bounce," he said. "The bad news is out."

Frank Ventura, chief financial officer of Lawrence-based St. Andrews Telecommunications Inc., said Qwest's cuts wouldn't hit home. St. Andrews resells long-distance and other communications services from Qwest and other companies.

"Communications continues to grow long term," said Ventura, a 30-year veteran of the telecommunications business, including 21 years at Sprint. "I don't think you'll see any thing catastrophic in the communications industry.

"The market Wall Street and investors and everybody else tend to be a little bit more emotional about the ups and downs than the communications professionals, who tend to know that the circuits will be in place and the phone calls will be completed whether we're growing at 10 percent, 12 percent or 8 percent.

"Most of the professionals in the industry know there are some cyclical impacts over a long period of time. It's not always going to be straight up. A little cutback is just part of business."

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