The combined elimination of 12,000 jobs will save the company $600 million a year once fully implemented, said Capellas, who added that cutting jobs "is always our last option."
The company did not specify what jobs would be cut and what locations would be affected. Besides its headquarters in Ashburn, the company's largest offices are in Tulsa, Okla.; Colorado Springs, Colo.; Hilliard, Ohio, and the former corporate headquarters of Clinton, Miss., according to the company's annual report.
"We clearly have more work to do to align our cost structure with the changing industry conditions," Capellas said.
The company estimated that the layoffs and other cost-cutting would allow it to return to profitability in the second half of the year.
Quarterly revenue declined almost 13 percent year to year, from $7.23 billion in 2003 to $6.30 billion this year. The company has lowered its revenue projections several times in recent months citing pricing pressure in the industry, and some analysts have said the company's current projection of about $21 billion in revenue for 2004 is still too optimistic. The company generated $27.3 billion in revenue in 2003.
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