CLINTON - A week ago, WorldCom Inc.'s employees and hometown supporters were hanging on encouraging words from the telecom's new chief.
John Sidgmore, the man who replaced founder Bernie Ebbers at the helm of the Clinton-based company, had a battle plan to rescue WorldCom from its financial woes and breathe new life into its anemic shares.
Today, Sidgmore is fighting to keep WorldCom alive after Tuesday's revelation that the nation's No. 2 long-distance company is at the heart of one of the largest accounting scandals in U.S. history. Internal auditors found that $3.8 billion was wrongly listed on its books as capital expenses in 2001 and 2002.
The news sent shock waves through the financial community, dropped WorldCom shares to pennies and brought immediate federal and state legal action against the company.
Only a few weeks ago, Sidgmore told shareholders at WorldCom's annual meeting he would take the tough steps necessary to revive the company, such as eliminating thousands of jobs and selling parts of the business.
On Thursday, he found himself promising President Bush he would do everything possible to restore trust in a company teetering on bankruptcy.
"Seven weeks ago, as I assumed the position of CEO of WorldCom, Bert Roberts, our chairman, and I pledged to restore trust in this great company," Sidgmore wrote Bush. "Never did we imagine it would be put to such a test."
Mississippi officials have promised a full investigation of the accounting boondoggle, and the Securities and Exchange Commission has filed fraud charges against the beleaguered telecommunications firm.
In addition, subpoenas are going out to WorldCom's top officials as Congress delves into the latest corporate scandal to shake investors' confidence.
"Corporate America has got to understand there is a higher calling than trying to fudge the numbers, trying to slip a billion here and a billion here and … hope nobody notices," Bush said Friday.
At the same time, Sidgmore was overseeing another unpleasant task - initiating a process that will end employment for 17,000 company workers worldwide, including some at its Clinton headquarters.
WorldCom eliminated about 1,300 jobs in Virginia, 1,000 in Texas, nearly 700 in Maryland and 500 in Colorado. In other states, the numbers ranged from a few to a few hundred.
WorldCom employs 2,000 people in Mississippi. That number was reduced by about 100 on Friday.
"I'm going to miss the friends that I have inside, and I'm worried about what they're going to do," said Kimberly Spencer, a 31-year-old mother of two who lost her job in the accounting department at WorldCom headquarters.
Visibly shaken, Spencer cried as she described the somber mood of her co-workers and said she and others were frustrated and angry.
The layoffs are the second round this year for WorldCom. In April, the company said it was eliminating 3,700 U.S. jobs to better align costs with projected revenue.
Clinton Mayor Rosemary Aultman said her city "remains solid" despite WorldCom's troubles.
Body shop owner John Mosley said small businesses will take the biggest hit should WorldCom fold.
He said the telecom's employees make up much of the customer base for restaurants, gas stations and other service businesses in the town of 24,000 about 10 miles west of Jackson.
"We had a lady this week who needed work on her car but told us she would have to hold off because she worked at WorldCom and wasn't sure what her future would be," Mosley said.
"But I don't see a major impact on the life of our city no matter what happens to WorldCom. I think most businesses will survive."
Still, Mosley said he's still stinging from the disclosures about WorldCom.
"I guess you could call me one of those disgruntled stockholders," he said. "I owned a good bit of stock and they've let me down as a company.
"Our town was proud to have them here. Now everybody is disappointed that they turned out like they did."
Also Friday, IDT Corp., a long-distance telephone and Internet services company, plans to offer WorldCom Inc. as much as $4 billion for its MFS Communications unit, said Chairman Howard Jonas.
IDT, based in Newark, New Jersey, is in talks with WorldCom's bankers about buying MFS, a provider of communications services to business and government.
Jonas said he will meet with WorldCom Chief Executive John Sidgmore next week to discuss the offer.
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