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Qwest job cuts may affect local employment From wire and staff reports DENVER - Qwest Communications International Inc. said Thursday it will cut another 7,000 jobs and warned that revenue for this year and next will fall short of Wall Street's expectations. The reduction of its work force to 55,000 is a result of reduced customer demand stemming from the deteriorating U.S. economy, Qwest said. The company will take a charge of $400 million to $600 million for severance costs and asset writedowns. The cuts come on top of 4,000 previously announced in September. When completed by the middle of next year, Qwest will have cut its work force by 17 percent. "We aren't sure yet which positions will be impacted, or where," said Qwest regional spokeswoman Mary Healy in Portland. "We do know every state will have to cut positions and Oregon will be part of that, but I don't have specifics yet and I'm not sure when we will." The first round of cuts is expected to be complete by the end of the year. The bulk of the second round of cuts would be nonmanagement and union jobs. With its broadband business stalling, analysts said Qwest's revenues would be worse if not for its local telephone service sector, which it acquired through last year's merger with U.S. West. Fewer telecommunications companies are buying pieces of Qwest's network and other companies are reluctant to buy more high-speed Internet access because of the weak economy, said Thomas C. Morabito, an analyst for McDonald Investments Inc. in Cleveland. "Qwest has more exposure to the high-growth broadband business that isn't high-growth anymore," Morabito said. Analyst Patrick Comack said Qwest had to reduce expectations after falling short before. The job cuts and its plan to reduce capital expenditures for 2002 from about $5.5 billion to about $4.2 billion should help relieve pressure on the stock, he said. "The stock has been in the penalty box for quite a while. I think their stock has lost some credibility and they've got to earn it back," said Comack of Miami's Guzman & Co. Within Qwest's 14-state region, Hammack said fewer retail customers are adding second lines to their homes or moving and requesting new service. "We don't see the economy dramatically turning around in 2002. What we're trying to do is right-size the business," Hammack said. Qwest also warned that revenue for the fourth quarter will be $4.8 billion, below the $5.07 billion expected by analysts surveyed by Thomson Financial/First Call. Earnings before interest, taxes, depreciation and amortization will be $1.7 billion, the company said. For the full year, Qwest said revenue would be $19.8 billion, below expectations of $20.3 billion. In 2002, Qwest now expects revenue to be in the range of $19.4 billion to $19.8 billion, below analysts' projections of $21.11 billion. Shares of Qwest were off 40 cents, or 3 percent, to $11.70, in trading on the New York Stock Exchange. Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.