The third-largest phone company in the U.S., Qwest Communications International Inc., is following a familiar strategy in corporate America after announcing a profit, albeit a declining one: layoff some of its workers. The Denver-based company announced Wednesday a third-quarter profit but pointed to pressure from declines in its traditional phone service that would force it to lay off nearly 1,200 workers, or 3% of its work force, to stay competitive.
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Qwest sees the erosion of its traditional phone services and future revenue due to consumers looking to pare down to strictly wireless or bundled services from cable providers. To offset the loss of landline phone customers, Qwest is offering speedier Internet connections and discount packages bundled with DirecTV satellite television. The telecom is also investing to expand its fiber network in 2009, which the company hopes to translate to more broadband Internet users.
Overall, Qwest reported that third-quarter net income fell 93% to $151 million, or 9
cents a share, from $2.1 billion, or $1.08 a share, in the year-earlier
period. One thing to note, the 2007 third-quarter earnings reflected a $2.1 billion tax credit. - Gerald Magpily
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