Communications Satellite Corp. is expected to announce major layoffs at its Washington headquarters within the next two weeks, according to several sources.
Communications Daily, a trade publication, reported that Comsat headquarters is "likely to lose at least 200 staff (members), possibly more" as part of a corporate effort to slice $20 million from overhead costs.
While Comsat spokesman Roger Cochetti said, "No decisions have been made regarding the number of employees that may be affected," the company did acknowledge that an undetermined number of layoffs are in the offing.
The company, Cochetti said, is "undertaking a corporate-wide review that is designed to strengthen the corporation by reducing expenses. In order to achieve efficiencies, reductions in force will result."
Sources within the company indicate that the company's headquarters staff in L'Enfant Plaza will be a prime target for the cutbacks. A Comsat spokesperson agreed that "our principal interest has been in corporate overhead functions."
While Comsat has some 3,500 employes, the layoffs are expected to come primarily from the nearly 2,000 employees in its support staff, Comsat General and the World Systems division in Washington.
Senior-level management will also be affected, sources claim.
Several industry analysts have long contended that Comsat was "top heavy" with staff, at least in part due to the fact that it is a quasi-governmental corporation. One analyst said the move demonstrates that the company is prepared to cut costs and strengthen its position in the increasingly competitive telecommunications marketplace.
In addition, since Comsat is seeking additional capital to finance its further expansion into direct satellite-to-home television and other competitive enterprises, the cutbacks are expected to enhance the company's image on Wall Street.
The cutbacks are not expected to affect Comsat's wholly owned direct broadcast subsidiary, Satellite Television Corp., or other of its new ventures.
As the U.S. representative to Intelsat, Comsat has a virtual monopoly on international communications by satellite.