Global Crossing cuts workforce amid ongoing funding problems

11 Oct 2004

Financially troubled international bandwidth operator Global Crossing has said it plans to reduce its 4,000 workforce by about 15% in a bid to balance its books for 2004. The Bermuda-based telco, which only emerged from bankruptcy in December 2003, has revealed that it needs a cash injection of USD40 million before the end of the year in order to maintain operations. Whilst it is expected that 61.5% shareholder Singapore Technologies Telemedia may step in to keep the company afloat in the short term, a bigger problem for Global Crossing remains the liquidity of its operations going forward. Global Crossing reported a USD225 million loss for the first half of the year as it struggled to remain competitive in a market blighted by excess capacity and insufficient demand. The company is currently said to be negotiating new agreements with a number of lending institutions through its UK subsidiary.