Despite the layoffs of "more than a third" of the headquarters staff, the company - which went bankrupt last week - is keeping its network running.
"A lot of people are working for free," said spokesman Piers Schreiber. He would not comment on who is financing the maintenance of the network, but it has been rumoured that Koninklijke KPN, which owns 40% of KPNQwest, is helping out. Many of KPN's customers use KPNQwest's network.
More layoffs are expected, for example at the company's Belgian business, which filed for protection from its creditors last week, but may go bankrupt later this week.
"There are some labour issues in Belgium," Schreiber said, declining to comment further.
KPNQwest's 18-country, 25,000km network is said to be Europe's largest fibre-optic network, carrying about 25% of the continent's Internet traffic. Rivals, including WorldCom and Vanco, are targeting KPNQwest customers and KPNQwest is helping clients to switch.
KPNQwest, once a stockmarket darling worth $40bn (£27.5bn), filed for bankruptcy last Friday. The company could no longer afford to keep its everyday business afloat after banks and its main shareholders, KPN and Qwest Communications International in the US, withdrew support. The company's assets are being sold piecemeal to the highest bidders.