Changes in Global Crossing Channel Nominal, Sources Say

Global Crossing Ltd. today laid off several employees that supported the companys channel program, according to sources close to the company. The reduction impacted less than five people in executive and support roles; names were not disclosed.

The action touched off rumors that Global Crossing was making sweeping changes to its indirect sales strategy. PHONE+ sources say there is not going to be a conscious effort to reduce partners” because there are are fewer resources.

They said cuts were part of an overall directing to reduce operating expenses. In its first quarter earnings report issued May 10, the company reported its cost-cutting generated opex savings of at least $20 million by reducing headcount, realigning organizations, outsourcing third-party maintenance and cutting discretionary expenses. Another $15 million in cuts is anticipated in 2007.

The number of company-wide layoffs was not disclosed. At the same time, the company added more than 1,400 to its payroll as a result of its recent acquisitions of Impsat and Fibernet.

I believe its four people frankly, but its amazing how much of a firestorm can get started, said agent Ben Humphreys of the layoffs in the indirect channel program staff. Humphreys is president of COMTEL Communications and president of the Agent Alliance buying consortium, which has a group contract with Global Crossing. Humphreys is confident the contract is not in jeopardy and is not concerned about the reductions in headcount being a sign of more to come.

I think they are going to be very intelligent about this, he said. I think any tier one carrier has got to look at this industry very carefully before they make a sweeping change.

Humphreys said he has been in conversation with the channel executives at Global Crossing and believes their intentions are to make some positive changes long term.

Among those changes are the mid-April appointment of Jeff Callahan as vice president of channel partners. This is the first time a channel executive has held a vice presidential title at Global Crossing, which is an indication of the companys commitment to the channel as a means to scale its sales force in North America, sources claim.

Most recently, Callahan oversaw the office of the CEO, working side by side with Global Crossings chief executive, John Legere, as well as other executives on strategy, business planning, finance, sales initiatives and more. He also has served in management roles in systems development, program management and sales operations at Global Crossing. Prior to joining Global Crossing, Callahan was a business consultant for Price Waterhouse.

Sources told PHONE+ the company is rededicating senior people in the channel to interface with partners going forward and that partners should begin to notice an increased level of support in the next few weeks.

In addition, Global Crossing channel executives, including Callahan, have been talking to partners like Humphreys about the staff changes and its plans to support their businesses.

Global Crossing reported consolidated revenue increased 11 percent year over year. Its core enterprise, carrier data and indirect channels segment, also referred to as its invest and grow segment, saw revenue increase 33 percent year over year.

Agent Alliance
COMTEL Communications
Global Crossing Ltd.

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