SEC: WorldCom Improprieties of Unprecedented Magnitude
WorldCom plans to maintain business as usual following its admission that it improperly accounted for $3.8 billion in expenses in 2001 and 2002.In the latest and most spectacular corporate financial scandal of this recession, WorldCom Inc. said last night that it improperly accounted for $3.8 billion in expenses in 2001 and 2002. The Clinton, Miss., telecommunications carrier said it plans to maintain business as usual despite the imminent layoff of 17,000 employees, but industry observers widely predict bankruptcy. Scott Sullivan, chief financial officer, was fired, and David Myers, senior vice president and controller, resigned yesterday. The company maintains that the improper bookkeeping will not affect customers or services. John Sidgmore, who became CEO after Bernie Ebbers was ousted in April, said his team was shocked to discover the accounting irregularities. "I want to assure our customers and employees that the company remains viable and committed to a long-term future," Sidgmore said in a press release late Tuesday. "Our services are in no way affected by this matter, and our dedication to meeting customer needs remains unwavering."
Beginning Friday, WorldCom will let go 17,000 employees, primarily in areas of discontinued operations, operations and technology functions, attrition, and contractor terminations, the company said.