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Qwest cuts jobs, guidance
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September 10, 2001: 10:14 a.m. ET
Telecom to eliminate 4,000 jobs, cut capital spending; warns on revenue
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NEW YORK (CNNfn) - Denver-based telecom Qwest Communications International Inc. warned Monday that it will post lower revenue than Wall Street forecasts and said it will cut 4,000 jobs and reduce capital spending.
The company said it expects revenue of $20.5 billion this year. Analysts surveyed by earnings tracker First Call had forecast revenue of $21.4 billion. The company also said earnings before interest, taxes, depreciation and amortization should come to between $8.5 billion and $8.8 billion.
In response to the slower sales, the company said it will cut capital spending by $2 billion to $5.5 billion. Because of the cuts, the company expects free cash flow will be positive in the second quarter of next year, two quarters earlier than previous expectations.
Qwest (Q: up $1.47 to $19.61, Research, Estimates) said it will cut staff to 62,000 from the current 66,000. The company will cut about 5,000 positions, but it also plans to hire 1,000 sales executives for its global business markets unit, who will focus on national accounts. The company said it will achieve the reductions through attrition and improved productivity.
The telecom industry has seen the worst layoffs of any sector in the current downturn in the U.S. economy, with outplacement firm Challenger Gray and Christmas estimating that 19 percent of 1.12 million layoffs announced by U.S. firms occurring in the sector.
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Qwest's cutback in capital spending also is in keeping with industry trends.
Telecom equipment providers such as Lucent Technologies Inc. (LU: down $0.09 to $6.02, Research, Estimates) and JDS Uniphase Corp. (JDSU: down $0.20 to $6.23, Research, Estimates) have been hit hard by the downturn in telecom spending this year.
Qwest provides both local phone service and high-speed Internet, data and multimedia over its fiber-optic network. 
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Qwest Communications
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