Qwest Cuts Growth Forecast, Announces 7,000 More Layoffs

Telecommunications company Qwest Communications International Inc. on Thursday cut its growth outlook through 2002, citing softer demand for voice and data services, and said it will reduce its work force by an additional 7,000 jobs, or more than 11%.

Qwest, the dominant local telephone company in 14 states from Minnesota to Washington, has suffered from weak sales of basic telephone services and shrinking sales of capacity on its high-speed fiber-optic network. It warned that it has not seen the bottom of the industry’s downturn.

“Demand is weaker across all of our product lines,” Qwest Chairman Joseph Nacchio told analysts during a meeting in Denver.

“I don’t see the bottom yet in terms of telecom,” Nacchio said. “October did come in weaker than we anticipated ... [and] we saw November being even weaker.”

Qwest said it will cut 7,000 jobs--in addition to 4,000 eliminated previously--mostly in Colorado, New Jersey, Ohio, Texas and Virginia. Qwest’s work force will shrink to 55,000 by mid-2002.

Forrester Research analyst Maribel Dolinov said, “There’s a lot of credibility to be derived by laying out the facts. They made a very open and honest presentation.’

Denver-based Qwest warned that its 2001 reported revenue would be about $19.8 billion, below analysts’ expectations of $20.3 billion. It will post a 2001 net loss of $2.30 to $2.38 a share. Qwest expects 2002 reported revenue to be $19.4 billion to $19.8 billion, little changed or down slightly from 2001 but below Wall Street expectations of $21.1 billion.

Qwest shares fell 30 cents to close at $11.80 on the New York Stock Exchange.