Troubled WorldCom tries to reassure government customers

Troubled WorldCom tries to reassure government customers

WorldCom Inc. is trying to reassure jittery government customers that the company's financial problems will not affect delivery of critical voice and data services.

Chief executive officer John Sidgmore said during a Washington news conference yesterday that he has been in talks with officials at the Defense Department and other agencies, including the Homeland Security Office.

'They are very nervous at this point that something will happen,' Sidgmore said. 'I think the chances of us having a major blip in our service provisions are low.'

WorldCom, which last week cut its earnings for 2001 and early 2002 by $3.8 billion and has seen stock prices drop to 6 cents a share, operates a large chunk of the Internet through its UUNet backbone and holds major voice and data service contracts with 77 federal agencies. Its operations are critical to national security.

'I don't see any significant chance of UUNet going dark under any circumstances,' including bankruptcy, Sidgmore said.

The company has laid off 17,000 workers, 20 percent of its work force, but a WorldCom source said layoffs among workers serving federal programs would probably be less than 20 percent. Among the company's federal customers is the Federal Aviation Administration

'They've assured us that the employees who manage air traffic operational networks will be protected from job cuts,' FAA spokesman Frazier Jones said.

The General Services Administration, which manages the FTS 2001 long distance service contract held by WorldCom, is considering whether to ban future contracts with the company. But GSA said it has received assurances from WorldCom officials that it will continue delivery of FTS 2001 service.

In a recent GCN Reader Survey, more 54 percent of the respondents said they use WorldCom's FTS 2001 contract for long-haul communications services [see story at www.gcn.com/21_3/departments/17866-1.html].

About the Author

William Jackson is a Maryland-based freelance writer.

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