Level 3: 'There Will Be Job Cuts'

By Josh Long Comments
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Fresh off its acquisition of Global Crossing, Level 3 Communications is taking steps to integrate the two communications providers.

That’s not necessarily good news for workers.

Level 3 anticipates laying off hundreds of employees, mostly in the U.S., as part of its effort to integrate Global Crossing, Reuters reported, citing a Level 3 top executive.

“In large parts of the world it is very minimal," Level 3 CEO James Crowe told the news wire service in New York. “Here in the U.S. there will be some job cuts."

Combined, Level 3 and Global Crossing have more than 10,000 employees.

In other news, the credit-rating agencies, Fitch Ratings and Moody’s Investors Service, have upgraded Level 3 after the company announced completing its acquisition of Global Crossing.

Explaining its decision following Level 3’s acquisition of Global Crossing, Fitch Ratings cited “de-leveraging of the company’s balance sheet" and noted expectations that Level 3 can “further improve its credit profile and generate consistent levels of free cash flow."

Fitch Ratings also said the deal boosts Level 3’s “competitive position."

“In addition to increasing LVLT’s [Level 3’s] scale, the acquisition enhances the breadth and depth of LVLT’s service offering and permits the company to expand into new markets," the credit-rating agency said. “Importantly, the acquisition broadens the spectrum of customers LVLT serves including large multi-national enterprise customers."

Moody’s Investors Service said Level 3 has “relatively poor" margins and a sizeable debt load but cited expectations that the company will “become modestly cash flow positive on a sustained basis within two years."

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