NEW YORK (CNN/Money) - WorldCom Inc. said Monday it will cut 5,000 jobs, or about 8 percent of its work force, in a bid to cut $2.5 billion in costs and help the phone company emerge from Chapter 11 bankruptcy protection.

"A work force reduction is always a difficult decision, but we are confident that our overall cost reduction plan will help us emerge from Chapter 11 and make us more competitive in the marketplace in the long run," said Michael Capellas, WorldCom's chairman and CEO, in a statement.

The latest cuts come after WorldCom slashed 17,000 jobs in 2002. The company currently has about 60,000 employees, according to Reuters.

"The steps we are taking will not only produce significant savings for the company but will benefit our customers by optimizing network performance and eliminating redundancies," said Capellas, who was named WorldCom CEO last November after leading Compaq Computer to its merger with Hewlett-Packard Co. (HPQ: up $0.34 to $17.75, Research, Estimates).

WorldCom also said it will consolidate facilities and renegotiate contracts with 2,600 suppliers as part of its cost-cutting effort. WorldCom said it will retain major facilities in seven states, Britain and Hong Kong .

The company, which filed for bankruptcy protection last July after an accounting scandal, said the cost-cutting announcement is part of its 100-day plan unveiled last month.

Clinton, Miss.-based WorldCom also wants to boost sales to small and mid-sized businesses, expand into more local telephone markets, and change its calling plans to try to strengthen revenues. It planned to boost sales to corporations by broadening its network integration and consulting services.

Analysts also expect the company to eventually shed assets such as its Latin American operations, and outsource more technical operations to save money.

The company has said it would release its three-year business plan by March 1. It must file a reorganization plan with the bankruptcy court by April 15. In Chapter 11, a company is protected from creditors while it tries to reorganize.

WorldCom's sales fell to $2.2 billion in November, from $2.3 billion in October, marking the steepest drop since the company began reporting monthly results in July. Its net loss from continuing operations narrowed to $194 million from $234 million.

WorldCom said recently it may take a charge of nearly $32 billion to write down the value of its plants and equipment. It previously said it may take a charge of up to $50 billion to write down the value of goodwill and other intangible assets.

-- from staff and wire reports