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According to the Wall Street Journal, an announcement of layoffs from the company's 75,000 global workforce is expected as early as Wednesday. The company, which is headquartered in Massachusetts and employs more than 160 people in Ireland, is facing the twin troubles of weak demand for its telecommunications services and a major US probe into its accounting practices.
The inquiry by the US Securities and Exchange Commission (SEC) comes after revelations that Worldcom had made around USD340 million in loans to its chief executive officer Bernard Ebbers. In February Worldcom also admitted it was conducting its own internal investigation into questionable sales commissions in some of its branch offices.
Worldcom shares have lost 50 percent of their value in the last three months alone and closed down 1.6 percent on Tuesday to USD6.89.
The revelations of scrutiny into Worldcom's books came as the telco announced steep falls in both revenue and net income, and admitted that sales in its data-services unit, Worldcom Group, will rise by single digits rather than double digits this year. The company also admitted it may be facing a massive write down of USD15 billion to USD20 billion in goodwill.
Last year the company announced 2,000 job cuts in Europe and more than 6,000 job losses in the US. Those reductions were in part due to the integration of its UUNET Internet subsidiary and to reduced capital expenditure, which is expected to drop by USD2 billion this year.
In Ireland most of the company's workforce is based in Dublin and the company also has small offices in Cork, Galway and Limerick. The company opened a USD30 million international data centre in Dublin last autumn, covering some 60,000 square feet.
Despite the troubles in the data centre industry, which have included the collapse of giants like Worldport, Wolfe Group and Cityreach, Worldcom has insisted that its new centre is doing well and has attracted high-profile clients since its opening.
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