With a big layoff at WorldCom’s Colorado Springs location, the latest blow to the region’s sagging economy, still optimistic area economists predict things will improve in the third or fourth quarter, and no later than early next year.
Exact numbers are unavailable, but WorldCom reportedly slashed hundreds of jobs in Colorado Springs Friday. Just last week, U.S. Secretary of Defense announced the U.S. Space Command would move to Offutt Air Force Base in Omaha, taking with it another 300 jobs. Last year over 3,700 high-tech jobs evaporated.
That is obviously bad news for the economy, with unemployment already above 5.5 percent. Still, area economists are optimistic the situation will get better later this year or early next year.
WorldCom stock plunged 90 percent to 6 cents a share in early trading Monday after a three-day halt following its disclosure of accounting irregularities totaling almost $4 billion. More than 250 million shares changed hands in frenzied trading in the first 15 minutes Monday.
A local WorldCom worker who asked to remain anonymous, said even those who kept their jobs expect more cuts in Colorado Springs. In the past six months, Colorado Springs has had a net loss in employment.
Salt Lake City-based “economic futurist” Jeff Thredgold, of Thredgold Economic Associates, said, “Obviously things are going to be in a state of flux (at local WorldCom offices) until people find where they fall in relation to the pecking order.”
“There is going to be a lot of anxiety and limited spending,” Thredgold said of those remaining local WorldCom employees.
Fallout from already announced job losses will not be entirely known until later when secondary jobs start ending. Economists estimate that for every high paying job, up to two “secondary” jobs exist. That means for every high-paying position lost, up to two lower-paying jobs are in danger.
Area retailers said sales were already sagging because of wildfires in Colorado. The Broadmoor Hotel reported hundreds of cancellations, and other attractions reported declining numbers as well.
Operators of the Royal Gorge Bridge report a 38 percent drop in attendance.