MCI Telecommunications, the communications services unit of MCI Communications Corp., has indicated some of its wireless employees in the Dallas/Fort Worth area may soon be looking for new jobs.
In a letter obtained by RCR written to Dallas-area wireless companies, the wireless reseller giant announced that various wireless professionals, including managers and individual contributors, “may be seeking outside employment in the near term … MCI is currently redirecting its efforts along core business activities. We are de-emphasizing activity in certain areas not currently our focus in the near term. We are aware that some of these areas are highly `in demand’ in the local Dallas/Fort Worth economy, and expect that any individuals who may choose to leave will have no trouble in obtaining suitable employment elsewhere in their specialty … MCI offers you the benefit of a select few of our most seasoned professionals,” wrote an MCI senior wireless manager in Plano, Texas.
Professionals in personal communications services radio-frequency engineering, wireless program management and wireless industry-related geographic information systems and MapInfo technical support might look for new jobs, indicated MCI.
According to company spokesman Jim Collins, MCI decided at the end of 1997 to eliminate positions, but the decision affects less than 1,000 employees-mostly contractors-and is part of the company’s normal practice of periodic adjustments and primarily affects the company’s information technology areas, although some cuts may have been within the wireless area, he said.
“In order to avoid large layoffs, we periodically do readjustments,” he said. “We assess where we are going, and we adjust accordingly and redistribute our resources accordingly. This is not unusual … It’s a little strange that there’s a letter like that.”
Collins insists MCI is still very much interested in the wireless arena. “We’re still talking about merging the benefits and intelligence with whomever we partner,” he said.
But some analysts have wondered why MCI-which today offers a one-stop shopping approach that includes wireless, local, long-distance and Internet service-has continued to contribute at all to its struggling wireless business. WorldCom Inc., which recently won the right to merge with MCI for $37 billion in stock, may be wondering too.
A November Prudential Securities report indicated that MCI’s third-quarter wireless revenue decreased from the previous year by $3 million, while cellular subscribers increased by only 4,000 from the end of the second quarter to 438,000 and were up only 7.6 percent from the previous year. The number of paging customers fell as well.
“We question why MCI is devoting any resources to this business if they are finding it impossible to grow, and customers are not actively seeking to bundle wireless with MCI long distance,” said Prudential.
Adding to MCI’s woes is the fact that C-block personal communications services licensee NextWave Telecom Inc.-which declared itself the carrier’s carrier-has yet to launch service. MCI in 1996 signed a resale agreement with NextWave to buy at least 10 billion minutes of wireless airtime during a 10-year period. At the time, NextWave said it expected to begin offering service by the middle of last year, but financial troubles have prevented the PCS startup from launching any markets.
The two companies expanded their agreement in April, signing a master service agreement requiring MCI to provide back-office support to NextWave. Part of the agreement calls for MCI Systemhouse, which primarily makes up the company’s information technology segment, to provide to NextWave support services such as integration and information technology services.
