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Global Crossing, which operates a fibre-optic network that connects 200 cities, said it would cut 1,200 jobs worldwide in an effort to cut costs. These cuts come in addition to 2,000 already announced job losses for the company and are part of an overall plan to cut annual operating costs in 2002 by USD550 million. At the start of this year, Global Crossing employed around 13,000.
In Ireland Global Crossing employs around 70 people in Citywest and Ballsbridge. To date there have been no cuts in the company's Irish operation in the year and it is thought that the recent round of cuts will have little impact here. Much of the work in the Irish offices centres on the company's network finance division as well as sales and marketing which are thought to be fairly safe from redundancy, for the time being.
The company said its third-quarter net loss came to USD3.4 billion, or USD3.84 per share, compared with a loss of USD602.4 million, or USD0.69 a share a year ago. Although the company's revenue climbed slightly to USD792.9 million from USD778.1 million in the year-earlier period, the company reported a USD2.08 billion non-cash charge as the company wrote off the shares it had received from now-bankrupt Exodus Communication.
Global Crossing, which rents its network to other carriers and offers additional communications services, said capital expenditures were projected to fall to near USD1 billion to USD1.25 billion in 2002 as a result of its current cost reduction scheme. Other recent changes for the company have included the October appointment of a new chief executive, John Legere. He took the post just before the company decided to scrap a plan which would have seen it acquire its partial subsidiary Asia Global Crossing. Regarding Tuesday's results Legere said the company had pulled back to a more realistic business plan.
"Over the past several weeks, the Global Crossing management team has reviewed every aspect of our business, from capital and operating expenses to our corporate culture, and to establish a position as one of the world's leading telecommunications service providers, we have defined an initial 'inter-city' focus as part of an integrated strategy and business plan," Legere said.
He went on to say that the downturn had "clearly" impacted the firm's business but pointed to some positive figures for the company including its commercial data revenue results which showed a growth of 43 percent in the quarter. He also said that the new cost reduction plan would cut the firm's operating expenses by more than a third in 2002 and would also improve operating profitability.
For the current quarter, Global Crossing forecasts between USD725 million and USD750 million in service revenue and an adjusted loss on an EBITDA basis of USD150 million to USD175 million.
Global Crossing has been a key player in Ireland's e-commerce initiatives after signing agreements with the Irish government for various high-speed Internet links to the US and Europe. In May it announced that a multi-million dollar agreement had been reached with the Irish government which was set to give Ireland links to 40 European centres along with major American cities such as LA, San Francisco, Dallas, Washington, Chicago and Boston.
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