McLeodUSA cuts 240 workers

McLeodUSA cut 240 employees from its ranks yesterday, the competitive local exchange carrier announced, reducing its total workforce to about 1,970 people.

McLeodUSA began seeking “strategic alternatives,” including a sale of the company, more than five months ago. It is now negotiating with its lenders, which have granted the company multiple forbearances on its loan payments.

Earlier this month, McLeodUSA’s chief executive officer Chris Davis and chief financial officer Kenneth Burckhardt resigned, leaving the company under the management of newly appointed chief restructuring officer Stan Springel. Springel had previously been working with the struggling CLEC as managing director of Alvarez & Marsal, a restructuring consulting firm hired by McLeodUSA in March.

McLeodUSA expects to record a $3.2 million restructuring charge in connection with the layoffs announced this week. Davis was paid nearly $1.4 million in severance, and Burckhardt received $910,000