Global Crossing execs cut pay, jobs in Phase 3 overhaul
Global Crossing CEO John Legere took a 30 percent pay cut as the company trimmed another 1,600 jobs and heads into Phase Three of its corporate revamp.
The networking company, which filed for bankruptcy in January and has been the subject of separate federal investigations over its accounting practices, had announced the restructuring last year. The latest phase outlines its "efficiency measures," which should cut operating expenses to $900 million in 2002, with a projected year-end run rate of $720 million, excluding its Asian unit. Its operating expenses reached $1.5 billion last year.
Along with the 800 voluntary job cuts it announced earlier, Global Crossing will cut 1,600 more jobs. The voluntary cuts are effective today. By the end of March, the company's workforce will sit at 6,000 employees, down from the 15,000 people who worked there at the beginning of last year, the company says.
Legere says his pay cut is effective immediately, even as other execs take similar reductions and add to their responsibilities. As part of the overhaul, Senior VP of Product Management Anthony Christie will take on the additional duties of developing the company's conferencing division as a stand-alone unit and prep it for a possible sale. Senior VP of corporate Development Chris Nash will keep working with potential bidders, and now manages potential sales of the company's units.
Jose Antonio Rios, president of the Latin America and Caribbean units, will now manage all European operations, as well. Executive VP of Finance Joe Perrone actually lost some administrative duties to other execs so that he can focus on the restructuring. VP of HR John Comparin will now oversee office administration and travel, and Dan Wagner, once chief of European operations, will be senior VP of IT, real estate, procurement and vendor management.
The company also plans to close 71 offices totaling more than 1.2 million square feet, for an annual savings of $150 million. It will cut capex to $200 million in 2002, excluding Asian operations, from $3.2 billion last year.
Finally, the company says it will consider selling its conferencing unit and its non-core national network in the United Kingdom, as part of an effort to divest non-core assets. In December, it sold its IPC Trading Systems division to an investment group for $360 million.