Viatel announces 30% employee reduction

(Telephony) Integrated telecommunications service provide Viatel announced Wednesday that it will slash its workforce by 30% as it focuses on providing broadband services to its corporate customers in the U.S. and Europe.

The action represents what Viatel described in a statement as a “logical evolution” as it completes its three-year, $2 billion network buildout plan. The cuts are part of Viatel concentrating its efforts on providing corporations with its existing managed bandwidth, advanced data services, dedicated and dial-up Internet access and dedicated voice services. Collectively these segments increased by 129% during the past 12 months.

The company currently employs 2200 workers worldwide placing the estimated layoff number at 660. A spokesman said the cuts will be in all offices and operations and that some U.S. employees have already been notified of termination.

“We are now better positioned than any other European-centric telecommunications company to meet the inter- and intra-continental networking needs of major corporations,” said Viatel Chairman and CEO Michael J. Mahoney. “Now is the time to devote all of our efforts to leveraging this next-generation platform to address the networking explosion that has only just begun in Europe.”

A spokesman said that the 6500-mile-route network buildout is just weeks from completion and was within its schedule and budgetary expectations.

The spokesman said Viatel would discontinue all consumer-based operations in Austria, Greece, Italy, Spain and Canada, countries where it does not own an infrastructure and cannot compete with companies that do. The company will also close consumer voice services in France, Germany and the Netherlands. Consumer-based services will remain in the U.K., U.S. Belgium and Switzerland.

“By streamlining operations and concentrating principally on the pan-European communications needs of major corporations and carriers, Viatel will immediately strengthen its current financial profile and improve its EBITDA,” Mahoney said.

Viatel stock closed at $5 yesterday, well below its 52-week high of $75.375.