Qwest will lay off 1,200 workers by the end of the year, the company said Wednesday, on the heels of reporting a 93 percent drop in third-quarter net income.
The Denver-based telecom provider said the job cuts will be spread among employees across the nation and throughout all job functions, from management to field technicians.
Qwest would not disclose how many of the layoffs will occur in Colorado.
Spokeswoman Diane Reberger acknowledged that the majority of Qwest’s management staff works in metro Denver, and thus Colorado will take the brunt of reductions that occur in those ranks.
The 1,200 layoffs represent about 3 percent of the company’s national workforce of 34,656. Colorado is home to 8,800 Qwest employees.
Qwest already had reduced its staffing by 2,370 workers in the past year, not including Wednesday’s layoff announcement.
Qwest joins a growing list of Colorado employers that recently announced job cuts in the face of a weakening economy.
Janus Capital Group, the state’s largest money manager, said last week that it would cut 110 jobs, or 9 percent of its workforce.
Frontier Airlines in August said it would cut more than 600 positions in Colorado.
Sun Microsystems laid off more than 200 people in Broomfield and Louisville recently.
Qwest continued to suffer losses in its traditional phone business to competition from wireless phone and cable companies.
Land-line phone customers fell from 13 million to 11.9 million in the past 12 months.
The company also lost 53,000 of its own wireless subscribers, a 6.5 percent decline from last year, after it canceled its deal to resell Sprint service and began offering Verizon as part of bundled services to Qwest customers.
“This was a challenging quarter for us,” Qwest chief executive Ed Mueller said in a conference call Wednesday with analysts.
“I will tell you now, though, that we expect to see improved results across each of our business units in the fourth quarter, mainly from an improved product mix and expected cost efficiencies.”
Broadband subscribers grew 11 percent from the third quarter of 2007, and Mueller noted that the company’s highest-speed Internet service now is available to 1.5 million customers.
Qwest’s third-quarter net income of $151 million was down sharply from $2.1 billion in the same period last year because the company had enjoyed a one-time tax benefit of $2.1 billion in third-quarter 2007.
The company’s operating income — not including interest, depreciation and taxes — was $1.08 billion in the third quarter of 2008 compared with $1.15 billion a year earlier. Operating revenue dropped 2 percent to $3.38 billion.
Qwest shares fell 20 cents Wednesday to close at $2.40.
“Things don’t look very healthy now at Qwest,” said Atlanta-based telecom analyst Jeff Kagan. “Key measurements are heading in the wrong direction. This marketplace and the economy are tough right now.”
Steve Raabe: 303-954-1948 or sraabe@denverpost.com
