MCI has reported disappointing financial results for its first quarter ending 31 March, blaming excess capacity and ensuing pricing pressures.
The company reported first-quarter revenue of $6.3bn, down from $7.2bn in the first quarter of 2003. Without its Embratel Brazilian unit, which the company plans to sell this year, revenue fell to $5.4bn from $6.6bn.
The net loss was $388m, compared with net income of $52m in the first quarter of 2003.
However, MCI did exceed slightly the revenue expectation which, excluding the Embratel results, was for $5.38bn.
To reduce costs, MCI intends to lay off 7,500 employees in the second quarter and consolidate its network operations further. To jumpstart revenue, it will focus on delivering new IP-based products to its enterprise customers.
WorldCom filed for bankruptcy in July 2002 in the midst of a massive multibillion-dollar accounting scandal. It sought shelter under Chapter 11 of the US Bankruptcy Code, from which it emerged last month.
In March, MCI reported a loss of $48.9bn in 2000, $15.6bn in 2001, and $9.2bn in 2002.
Juan Carlos Perez writes for IDG News Service