Qwest To Cut 11,000 Jobs

Friday, September 8th 2000, 12:00 am
By: News On 6

DENVER (AP) — Qwest Communications International Inc. is cutting 11,000 jobs — about 15 percent of its work force — as part of its plans to refocus and streamline operations following its acquisition of regional phone company U S West.

In addition to the cuts, which will affect mostly white-collar positions, Qwest will eliminate 1,800 contractor jobs, Qwest chairman and chief executive Joe Nacchio said Thursday.

Nacchio said the changes would help Qwest refocus on broadband, Internet, wireless, and bundled services, where he expected to see more growth.

``We've come a long way in a very short period time to put the new company on the right economic footing,'' Nacchio said. ``We've positioned the company to ride the right macroeconomic waves that are driving growth in our industry.''

He said revenue — fueled by growth in broadband, wireless and Internet services as well as telephone service — should reach between $18.8 and $19.1 billion this year, up from a target of $18.5 billion.

The company planned to cut 4,500 jobs by the end of the year and 6,500 more by the end of 2001, Nacchio said. Some 800 contract positions will be cut this year, with the 1,000 remaining cuts coming in 2001, he said.

The job cuts, made to eliminate overlaps, eclipsed projections made at the time of the merger with U S West in June of 1,000 cuts. Qwest has about 71,000 employees.

Chief financial officer Robert Woodruff said Qwest expected to report anywhere from $900 million to $1.7 billion in third-quarter costs related to downsizing after the acquisition.

The telecommunications company is working to sell 570,000 rural lines in various states, leaving Qwest with about 17 million lines. Nacchio declined to comment on analyst projections that Qwest would sell 5 million lines by the end of the year.

The sale would leave those rural customers out of Qwest's plans to focus on providing customers with broadband services and speedy Internet access.

``There's no clear answer on how to solve the digital divide,'' Nacchio said. ``But we're not the company alone to do that.''

Qwest also made several related announcements Thursday, including the launch of Qwest Digital Media, a subsidiary to be headed by former Cox Communications Inc. executive David Woodrow. The new unit will focus on high-speed delivery of digital video and other content.

Nacchio also pledged a 20 to 30 percent improvement in customer service by the end of 2001 but warned it would take a while to undo U S West's former nickname, ``U S Worst.'' In some cases, customers have had to wait more than 30 days to get a new phone line or other service.

Shares of Qwest were down $2 to close at $49.44 Thursday on the New York Stock Exchange.