Level 3 cuts 1,400 jobs; lowers 2001 projections
Level 3 Communications lowered its projected revenue from communications and announced it will lay off 1,400 workers. The company also switched its market focus from small to large, established companies.
The company estimates about 20 percent of its recurring revenue base is at risk and will be through the rest of the year. It reported a $5.3 billion backlog at the end of its first quarter, and says about 67 percent of that is from dark fiber and related services. Of the dark fiber group, about 20 percent of business is from at-risk companies.
It opted to refocus its global sales effort on services to established companies "with substantial needs for bandwidth services," it says, although it adds it will still provide services to startups.
The company projects communications revenue of $1.3 billion in 2001, up 50 percent over last year. Of that, roughly $280 million will come from nonrecurring dark fiber sales, it says. Likewise, transport will generate 40 percent to 45 percent of 2001 communications revenue, and IP and co-location 20 percent to 25 percent.
Of its 5,900 employees, Level 3 will lay off 1,400, primarily in the communications business, it says, including about 820 in North America, 550 in Europe and 30 in Asia. It will take a $100 million, one time charge in the second quarter, $40 million of which relates to the layoffs.