Teleglobe 'Revectors' 450 Jobs

To eliminate approximately 20 percent of its workforce and take a Q3 restructuring charge of $70 million to $90 million

August 31, 2001

1 Min Read

RESTON, Va., and MONTREAL -- Responding to changing international market conditions, Teleglobe (NYSE, TSE: BCE), the e-World Communications Company, today announced plans to revector portions of its business during the next month which will result in the elimination of approximately 450 positions, or 20 percent of its workforce, an associated FY 2001 third quarter restructuring charge of between U.S. $70 and $90 million as well as a further reduction in its capital expenditure. The reductions-in-force will be primarily centered in the company's Reston, Virginia and Montreal, Canada facilities affecting the voice business, network planning and operations as well as general administration. Annualized savings from the move are expected to total approximately U.S. $50 million. Teleglobe estimates that its CAPEX plan extending thru 2003 will be lowered approximately U.S. $500 million from $3.4 billion to $2.9 billion. In April, the company adjusted downward estimated requirements from $5 billion to $3.4 billion, largely reflecting cost improvements available due to over capacity in fiber supply as well as significant progress in the build out of its GlobeSystem network, a reduction in Internet data center requirements and other optimization and cost savings. "Given the worldwide deceleration in our industry, selected business operations are being restructured to lower costs, more effectively utilize finite resources and better respond to customer needs," said Terry Jarman, Teleglobe's Chief Executive Officer. "The adjustments being made do not signal a change in our strategy or direction but rather a realization of a lower trajectory in our growth forecast. The company will continue to place emphasis on building its network based services business. We believe Teleglobe remains well positioned to take advantage of an upturn in market conditions." Teleglobe

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