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Wholesale/transport services

Williams Loses Key Staff

Williams Communications Group (NYSE: WCG) has suffered a spate of departures of key staff in the past couple of months, prompting speculation that it's running into trouble.

The exodus began in July, when Gordon Martin, then president of carrier services at Williams, left to become CEO of America's Fiber Network (AFN). Martin was soon joined by a string of other Williams executives, who quit to join AFN. They included Gary Watson and Kathy Case, vice presidents of operations, Bill Hampton, VP of sales, and Jack Biery, executive director of Williams network labs and materials.

The trickle of departures became a flood as other staff realized that the grass might be greener (or at least the options packages might be bigger) at startup equipment vendors.

One of those people was Andy Wright, chief technologist, optical networking -- the guy in Williams's network division responsible for picking their optical equipment suppliers. Wright recently joined Solinet Systems as director of network planning. Solinet is in stealth mode, but it's thought to be developing ultralong-haul transmission equipment (see Is Trouble Brewing in Ottawa?).

A total of about 50 staff have left Williams's network division, but that needs to be put into context, according to Lynne Butterworth, the company's manager of media services. It's a pin-prick compared to the total number of staff at Williams, which has 10,000, she says.

Still, losing so many senior people at the same time has cast an air of gloom over the network division, according to ex-staff. Its stock price has languished of late, partly because service providers in general have fallen out of favor on Wall Street, and partly because investors have reacted adversely to Williams's plans to raise an additional billion dollars in debt for capital expenditure (see Wall Street says 'Whoa' to Williams).

Butterworth, however, maintains that the recent Williams departures are nothing out of the ordinary.

"Williams continues to attract some of the top talent. Competition is pretty stiff for the top people," said Butterworth. "We continue to have a retention rate that's higher than that in the industry."

-- R. Scott Raynovich, executive editor, Light Reading http://www.lightreading.com

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