Level 3 to Cut 700 Jobs
Level 3 Communications plans to cut about 700 jobs, as it struggles to turn its first profit in 15 years and achieve operational efficiencies. The communications company is cutting approximately 6.5 percent of its global workforce, according to a report in the Denver Post. The Colorado-based company operates one of the world's largest Internet backbones, carrying an estimated 40 percent of U.S. Internet traffic. Level 3 expects to cut 150 positions in Colorado, where it employs 2,700. On a global basis, the company operates with 10,600 employees in 55 countries. Since being named CEO in April, Jeff Storey has trimmed the ranks of management and combined functions, such as bundling together its communications and investor relations departments. Wells Fargo analyst Andrew Spinola on Friday gave a thumbs-up to the latest job cuts. Last year, the company cut about 400 jobs during its merger with Global Crossing. However, Level 3 has yet to post a net profit since going public 15 years ago. The company, weighed down by debt, posted a net loss of $422 million on revenue of $6.4 billion last year. Analysts say its debt load of about $9 billion hampers its ability to respond in an agile way to new markets and services, according to the Denver Post. Although it's been struggling to move its finances forward, it has struck several high-profile partnerships including one with Google, with which it recently landed a contract to replace AT&T as the Wi-Fi service provider for Starbucks’ more than 7,000 stores. Netflix is another major client. Telecom workers shouldn't get discouraged with the industry's outlook, based on Level 3's anticipated layoffs. Jobs in the telecom sector, which for years have declined, have been posting year-over-year increases for the past three months.