- The Washington Times - Saturday, June 29, 2002

Payday at WorldCom Inc. yesterday came with the news that 1,900 workers in Northern Virginia and Maryland would lose their jobs.
WorldCom laid off 650 workers at its Pentagon City facility in Arlington, 500 at its massive Ashburn campus and 50 workers in Vienna.
The company also laid off nearly 700 people at its Hunt Valley, Md., facility.
Northern Virginia bore the brunt of the beleaguered telecommunications company's decision to fire 17,000 people.
"Being out of work is always hard, and my heart goes out to the workers," said Mark R. Herring, who represents the Leesburg district on the Loudoun County Board of Supervisors.
About 8,000 of WorldCom's 80,000 employees worldwide work in Virginia. Layoffs in Pentagon City, Ashburn and Vienna eliminated 15 percent of the company's local work force. WorldCom laid off workers worldwide, but no other North American region suffered as many layoffs as Northern Virginia.
WorldCom also let go 1,000 workers in Texas, 500 in Colorado and 450 in Georgia. Layoffs in a number of other states were lower.
Fewer than 100 people were laid off in Mississippi, where the company has its headquarters.
WorldCom laid off 7 percent of its work force just three days after the revelation that it hid $3.8 billion in expenses to boost earnings. WorldCom said it hopes to save $900 million annually by making deep cuts to its work force.
Although the company acknowledged that it made layoffs yesterday, it had no formal announcement outlining the details of the decision. Instead it held group meetings with employees. Meetings at metropolitan Washington offices began at 11 a.m. yesterday. Sales representatives who have worked at the company less than six months and salesmen the company felt were not selling enough, regardless of the length of their tenure at WorldCom, were among those laid off yesterday.
Sources said employees at WorldCom's UUNet group were not subject to layoffs. UUNet Technologies is the Internet-backbone company WorldCom acquired in 1996. WorldCom Chief Executive John Sidgmore came to the company from UUNet.
Few people laid off at WorldCom filed for unemployment benefits yesterday, according to state workers at the regional offices of the Virginia Employment Commission.
"We expect it to pick up next week," said Laura Coburn, employment transition services manager for the northern region of the commission.
Laid-off workers are eligible for unemployment checks of up to $368 a week for 26 weeks. Benefits could be extended an additional 13 weeks under a federal program approved by Congress after the Sepember 11 terrorist attacks. Laid-off workers could receive as little as $69 a week under the state program.
WorldCom gave workers eight weeks of severance pay yesterday. Workers with more than eight years with the company received an extra week of severance pay for every year above eight years on the payroll.
WorldCom's layoffs fit an industry trend. More than 300,000 people in the telecommunications industry nationwide lost their jobs from March 2000 through Feb. 2002, according to a report by Ernst & Young LLP conducted for the Virginia Center For Innovative Technology, a state-funded group promoting the tech industry. The report was released yesterday.
Loudoun County Economic Development Director Larry Rosenstrauch said highly skilled workers laid off by WorldCom could find jobs quickly. Loudoun County companies hired 6,000 workers last year and employ 95,000 people now.
"I think the long-term prospects are positive, but in the short term, 1,900 families are feeling the pinch," Mr. Rosenstrauch said.
When WorldCom opened its Ashburn campus in 1999, it indicated that its local work force could grow to 20,000 workers within 12 to 20 years. There were 4,000 workers at the campus before the layoffs. It also had approval to develop 7.4 million square feet of office space. It has developed just 2 million square feet.
Loudoun County politicians put WorldCom's plan to build the 534-acre corporate campus in Ashburn on a "fast track" in 1998. The nine-member Loudoun County Board of Supervisors quickly approved a rezoning application for WorldCom, paving the way for what the board hoped would become the county's biggest employer.
County officials fought public resistance to the plan and voted to circumvent the full public-hearing process to expedite the rezoning application. Loudoun and Virginia also put up $1 million each to help build a six-lane road through the campus.
Board Chairman Dale Polen Myers and other board members said tax revenue from the campus would pay for the new schools and facilities that would be needed for Loudoun's rapidly growing population, which doubled between 1990 and 2000.
"Officials were just beguiled by the prospect of high-salaried workers moving into the county and the prestige of WorldCom, which [in 1998] was at the top of the world," said Margaret "Peggy" Maio, the Loudoun field officer for the Piedmont Environmental Council, among a handful of groups that opposed the campus. "It's a good lesson not only for Loudoun County but for other regions that get caught up in the euphoria of a potential business endeavor."
Now it looks as though WorldCom will sell some of the land where they once planned to build new offices.
Mr. Sidgmore wrote in a letter to President Bush yesterday that the company will sell "non-core businesses" to raise an estimated $1 billion and cut $1 billion in expenses. WorldCom will try to raise $200 million by selling Northern Virginia real estate it owns, according to an internal memo.
Mr. Sidgmore also wrote in his letter to the president that WorldCom was "in close consultation with our banks to secure additional lines of credit to preserve our ability to finance our debt." WorldCom has a $2.65 billion loan, held by a collection of banks, that it could be forced to pay back at any time.
Separately, a federal judge yesterday barred WorldCom employees from destroying documents or receiving payments of more than $100,000. U.S. District Judge Jed Rakoff signed an order proposed by the U.S. Securities and Exchange Commission in its suit contending that WorldCom defrauded investors. The judge said he would appoint a monitor to oversee document retention and compensation to officers or employees.
Brian DeBose and Jeff Barnes contributed to this report.


Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide