WorldCom - One More Nail In The Coffin

The company, America's second biggest long-distance telecoms group, has fired Chief Financial Officer, Scott Sullivan, and has confirmed that the restatement of its last five quarterly figures will wipe out all profits since the beginning of 2001.

WorldCom, which switched auditors from Andersen to KPMG, called in the US Securities & Exchange Commission as soon as it discovered it had overbooked operating expenses as capital investments and flattered cashflow.

The group announced plans to cut 20% of its workforce, 17,000 jobs, as part of its bid to reduce costs by around $900m a year. The headcount reductions will begin on Friday.

Andersen issued a statement which said that WorldCom had withheld key information and had not consulted its auditors about the accounting treatment of expenses.