Telecomms industry faces massive layoffs

Competitive pressures have prompted telecommunications firms to eliminate thousands of positions in recent months as they shift their focus to areas of higher growth.

          Competitive pressures have prompted telecommunications firms to eliminate thousands of positions in the US recent months as they shift their focus to areas of higher growth.

          Thirty-one internet companies that specialise in telecommunications products and services have announced layoffs within the past six months, according to The Industry Standard magazine.

          Verizon Communications in New York reported last week that it would cut 10,000 jobs through attrition and reductions in the use of consultants and the amount of employee overtime. And a week earlier, Milpitas, Californnia-based PCtel announced an 11% head-count reduction and a hiring freeze.

          "My phone is ringing more often these days with candidates looking for positions," says Richard Murphy, a recruiter at Miami-based The Recruiters Group, which specialises in the telecommunications sector.

          Brownlee Thomas, an analyst at Cambridge, Massachusetts-based Giga Information Group, says that unlike last year, when the market values for these firms were soaring, many are now tanking along with the rest of the stock market. As a result, many telecommunications companies are laying off customer service representatives and low-level technicians, says Thomas.

          At Verizon, about 1500 employees will lose their jobs, but, in most cases, they will be given a chance to transfer to other divisions, says spokesman Peter Thonis, noting that areas such as data services are growing 30% per year vs. 3% to 4% growth for voice services. Bedminster, New Jersey-based Verizon Wireless is also growing at a clip of about 20% per year, says Thonis.

          Sprint eliminated 200 to 250 jobs in the desktop services area in November but gave workers the chance to seek jobs in other divisions, says company spokeswoman Katrina Bawcom.

          Wayne Mitchell worked at Sprint Enterprise Network Services in Dallas for about 18 months as a technical service consultant before he was laid off. He was offered another job, but it involved installing third-party software.

          It "was not a challenging opportunity," says Mitchell, who is still unemployed but has been talking with recruiters about jobs in systems administration and desktop and customer support. "I decided not to do that, [and then] the economy started taking a drop, and the opportunities dried up really fast."

          The slump in the telecommunications industry seems to be hitting everywhere. Even big-name firms like Lucent Technologies have seen their share prices plunge. Last week, Lucent traded at less than $US15 per share; its 52-week high was about $US75 per share. The Murray Hill, New Jersey-based networking equipment provider announced last month that it would eliminate 10,000 jobs.

          While long-distance carriers AT&T and WorldCom haven’t announced layoffs in recent months, they, too, have been experiencing sagging share prices.

          "They’re trying to convince shareholders that they’re a New Economy company," says Thomas. "They are under tremendous pressure to be all things to all people."

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