On August 29, 2013 the Denver Post revealed the layoff of 700 Level 3 Communications (LVLT) employees across their global operation. The layoff represents a 6.6% reduction in their 10,600 global workforce. Level 3, based in Broomfield, CO, will lay off 150 of the 2,700 Colorado based employees.
This current round of layoffs follows in the wake of last yearâ€™s release of 400 employees in response to the Global Crossing integration. While Level 3 reported revenues of $6.3 billion for 2012, and $3.1 billion for the six months ending June 30, 2013, they have reported losses for 18 consecutive quarters.
Wells Fargo analyst Andrew Spinola said, “New CEO Storey continues to take steps to reshape Level 3 and improve the organization’s effectiveness. As we’ve noted previously, we believe that Storey has the right strategy, but it will take time to implement the changes and see the benefits in the financial results, in our view”. Storey succeeded long-time CEO Jim Crowe in April 2013 and has since begun to make changes to the organization by eliminating the M&A executive position and combining investor relations with corporate communications. These changes illustrate a divergence from a long time position of corporate spending while trying to bolster performance.
Level 3 is also a key player in the data center and colocation business, expanding their footprint with the Global Crossing acquisition. In the U.S. their current portfolio includes approximately 1.5 million square feet of space. Global Colocation and Data Center Services revenue grew from $277 million in 2012 to $287 million in 2013 for the six months ending June 30, a 4% increase.
For questions about this report contact Alan Howard at ahoward (at) wiredre.com or Wendy Coulter at wcoulter (at) wiredre.com.