Hours before MCI WorldCom announced it would trim 4 percent of its workforce, or about 3,700 people, at least 30 Web developers in its once high-flying Internet business unit were escorted from the company’s Cary I building off Weston Parkway, according to a source inside the company.

The number of local cutbacks statewide reached 100.

Much of MCI’s Internet and networking infrastructure is centered at the Cary campus. WorldCom officials declined to break out local numbers, but they did say that no layoffs in the company’s long-distance unit are anticipated. The number of today’s layoffs is a little more than half of what published reports predicted earlier this morning.

Employees were anticipating that layoffs would begin at 11 a.m. today, and not long after that co-workers watched their colleagues carry boxes of personal possessions out to their cars, the source says. Many people were told ahead of time that they would not be laid off, the source adds.

“Word around here is that there will be another one (round of layoffs) in two weeks that focuses on service centers,” the source says.

This latest round of layoffs brings the damage count at Miss.-based WorldCom to about 12,500 employees during the last year. The original round of cuts came almost exactly one year ago when the company announced it had trimmed its workforce by 7,000.

Employees affected by today’s cuts are being offered severance of anywhere from six weeks to six months worth of salary depending on their tenure with WorldCom, the source says.

Telecom sector’s legs still rubbery

According to research firm Challenger, Gray & Christmas, which tracks monthly layoffs in the overall economy, almost 22,000 telecom workers lost their jobs nationwide in March. Since Jan. 1 the total has reached 85,500. In 2001, a total of about 318,000 telecom workers were cut from company payrolls. Incidentally, retail was the hardest hit sector with about 23,000 workers losing their jobs, according to Challenger.

In the Triangle, it is believed that close to 10,000 telecom workers have lost their jobs during the last 18 months, including half of Alcatel’s 1,500-person workforce and Verizon’s decision to move its regional headquarters from Durham to Tampa Bay. The fate of those 1,000 local workers remains in limbo. Nortel and Cisco, which rely heavily on telecom and Internet networking sales, also have shed substantial portions of their RTP workforce. And Lucent Technologies closed its research lab on NC State’s Centennial Campus.

And the telecom turmoil has not skimmed past the financial services industry either. In Charlotte, Wachovia securities cut back several of its telecom analysts, including long-time expert Stephen Shook. In Raleigh, the Gartner Group recently closed its office, leaving local telecom guru David Rendall, who previously had sold his consulting firm to Gartner but remained with the company, out in the cold.

Sector struggling through three killer blows

WorldCom is suffering from what is now commonly referred to by industry analysts as the perfect storm. Consumer demand for long-distance services is decreasing thanks in part to the rise in cellular telephone use during the last two years. According to Boston-based research firm The Yankee Group, the number of wireless voice subscribers grew from 109 million at the end of 2000 to 128 million through December 31, 2001, which indicates that the customer base of traditional service providers is shrinking.

WorldCom also has been kicked around competitively by those CLECs who completed the build out of their networks before the capital market turned its back on telecom. Companies like Raleigh-based BTI Telecom and media giant subsidiaries such as Adelphia Business Solutions, which has a fiber-optic network established in Raleigh, have driven down prices for business services, much like the drafters of the 1996 Telecom Act hoped would happen at the retail level.

Meanwhile, WorldCom has been trying to compete for high-speed Internet services against giants such as BellSouth, AOL-Time Warner and smaller service providers that concentrate on business customers, like Charlotte-based US LEC. But they are not having as much luck cracking the ISP market.

Analysts also are expressing concern about WorldCom’s fourth quarter earnings report. Company revenues decreased 15 percent to $13.83 billion with a net loss of $23 million compared to an income of $1.57 billion. Shares of WorldCom stock have ranged in price from $5.50 to $19.33 during the past 52 weeks, and recently traded near $5.55.

WorldCom also is struggling under a $30 billion debt burden. The company announced today that it is redeeming $700 million worth of notes in order to pay down some of that debt.

Today’s cutbacks by WorldCom at the Cary facility seem to indicate that the company is rethinking its Internet services strategy, but not pulling out altogether. A recent research report published by the Lehman Brothers says MCI WorldCom will continue to shrink in the coming years.