Friday, January 17, 2003
Some analysts predict WorldCom will use the name of its MCI long-distance division.
CLINTON, Miss. (AP) -- WorldCom Inc. plans to file its reorganization plan and emerge from bankruptcy court this spring, chairman and CEO Michael D. Capellas told employees.
He also told workers in a broadcast to expect some employee dismissals over the internal investigations into the company's $9 billion accounting fraud.
"Bad things have happened to us," said Capellas, who spoke from a WorldCom sales office Tuesday in Orlando, Fla. "I know it will be tough. But we have the will to win."
Capellas promised that WorldCom -- which filed for bankruptcy in July and is still being investigated by the Justice Department and Securities and Exchange Commission -- would act with "an outrageous sense of urgency."
The address was short on specifics, but Capellas promised to deliver a detailed three-year business plan March 1.
"Today was his coming-out party," said Jeff Kagan, an independent telecommunications analyst. "It wasn't about specifics."
Speculation on plan
Some analysts expect WorldCom to try to shed its negative image by assuming the name of its long-distance unit, MCI. Several noted that Capellas' reshuffling of executive assignments, announced Tuesday, favors executives from WorldCom's MCI Group.
Analysts also noted that Capellas -- who led Compaq Computer Corp. through a restructuring and a merger with Hewlett-Packard Co. -- is taking a page from his computer background in his turnaround strategy for WorldCom.
They cited his vow to target the small- to medium-size business market and assign his top executives to shadow a select group of top business accounts. All these were tactics he employed at Compaq.
"His strategy is tainted with his prior background, and that's good," said Frank Dzubeck, president of Communications Network Architects. "He understands how companies in the computer industry have reorganized to be competitive, and now he's doing it with a 500-pound gorilla."
Dismissals
Capellas didn't address the accounting scandals and strategic missteps that led to the ouster of former WorldCom CEO Bernard Ebbers and conviction of four former executives. But he indicated that an internal investigation has uncovered evidence some employees still at WorldCom may have been involved in accounting abuses.
"There will be some people who are leaving the organization as a result of some of these reports," Capellas said.