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MCI Lays Off 2,000 More
Long-Distance Firm Cuts Sales Positions

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  MCI's 2,000 layoffs followed cuts of 1,700 in January; 4,000 in March; and 7,500 in May. Its workforce has dropped to about 40,000 employees. (Jay Mallin -- Bloomberg News)


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By Bill Brubaker
Washington Post Staff Writer
Saturday, June 26, 2004; Page E01

MCI Inc. said yesterday that it is eliminating 2,000 U.S. sales jobs as part of a cost-cutting effort in the face of increasing competition, declining revenue and greater reliance by consumers on e-mail.

After the latest in a series of job cuts, MCI's workforce will total about 40,000, down from more than 56,000 at the end of last year. The Ashburn-based telecommunications company emerged from bankruptcy reorganization on April 20.

Spokesman Peter Lucht said the jobs being eliminated are concentrated in Colorado Springs, Colo., and Wichita, Kan., where MCI is closing call centers, and Greenville, S.C., and Iowa City, Iowa, where the company is reducing telemarketing operations.

The company also is paring a sales force that calls on small- and medium-size businesses in the Washington region and across the country, Lucht said.

He said the layoffs were necessary because of "realities in the telecommunications marketplace, including federal legislation that has resulted in 62 million people joining the 'Do Not Call' list . . . and increasing use of e-mail."

An MCI employee who works in the company's small-business sales operation said some workers were told of the layoffs Thursday in a brief, listen-only conference call.

"They gave me a day's notice. I'm already looking for another sales job, probably in the pharmaceutical industry," said Hiruy Yimam, 25, who worked for MCI out of his home in the District. "It was very callous and cold-hearted the way they did it. We got on the conference call and [an executive] read from a letter." The call lasted less than a minute, he said.

Lucht declined to discuss specifics of the layoffs.

MCI announced job cuts of 1,700 in January; 4,000 in March; and 7,500 in May. The company said in May that it lost $388 million during the first quarter of this year, compared with a profit of $52 million in the first quarter of 2003. MCI reported revenue of $6.3 billion in the first quarter, compared with $7.2 billion in the first quarter last year, a 12.5 percent decline.

F. Drake Johnstone, an analyst for Richmond-based Davenport & Co., said the latest layoffs are not surprising. "Local phone companies are being very aggressive in taking significant market share away from MCI and AT&T," he said.

MCI also said it may raise rates or pull out of some markets because the U.S. Supreme Court let stand a lower court decision discarding rules that forced regional phone companies, such as Verizon Communications Inc., to lease their networks to rivals such as MCI at discount rates. AT&T announced this week that it will no longer sell local and long-distance service in seven states.

MCI stock closed yesterday at $14.70, up $1.15.


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