Qwest Communications International Inc would cut up to 15,000 jobs if it succeeds in acquiring MCI Inc, more than double the work force reductions planned by Verizon Communications Inc in its deal to buy the long-distance phone company.
The proposed cuts were detailed in a presentation that Qwest officials planned to deliver at a meeting with investors yesterday morning to argue the case for its renewed US$8 billion bid to buy MCI.
Denver-based Qwest, the local phone company for most of the Rocky Mountains and Pacific Northwest, has embarked on an aggressive campaign over the past week to break up the US$6.7 billion Verizon deal, which MCI agreed to despite a lower price.
The Qwest presentation, posted late on Monday on Qwest's Web site, detailed potential cost savings of more than US$10 billion over the first four years after the proposed merger with MCI.
Qwest also reiterated several points it made last week in relaunching the US$8 billion bid -- which offered enhancements to speed up the cash payoff to MCI investors and provide downside protection on the stock portion of the deal by offering to increase the amount of Qwest stock paid if the market value of those shares declines.
Those enhancements were designed to address concerns by MCI shareholders that, although the Qwest deal offered a higher initial payoff, Qwest's vastly inferior financial and strategic health made the terms more risky.
Qwest argued that its deal would be far less harmful to competition than a Verizon-MCI combination, and therefore more likely to pass government scrutiny with less objection.
The job cuts proposed by Qwest would total between 12,000 and 15,000 positions from the combined Qwest-MCI work force, currently about 81,000 workers.
By contrast, New York-based Verizon, the dominant local phone company in the Northeast and Mid-Atlantic, said it would eliminate about 7,000 positions in the agreement it reached with MCI two weeks ago.
The Qwest deal values MCI at US$24.60 per share, while Verizon's offer is worth about US$20.55 a share.
RSS