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WorldCom's Bankruptcy Expected to Have Ripple Effect on Northern Virginia - 2002-07-23

The bankruptcy of WorldCom, the big telecommunications company, will have a major impact in northern Virginia, which is the home of two WorldCom operations the MCI phone company and UUNET, which handles much of the world's internet traffic.

WorldCom employs 8,000 people in the metropolitan Washington area. About 4,000 of them work here at UUNET headquarters in Ashburn, Virginia. Located next to Dulles International Airport and America Online, the WorldCom facility is a modern complex of five low-slung, metal and glass buildings. Outwardly, it was business as usual Monday. But as workers made their way across the parking lot, they waved off reporters' questions saying that had strict orders not to speak.

But two kilometers away, the owner of the Crest used bookstore, Phylis Smith, is eager to talk about the WorldCom bankruptcy. "It boggles my mind that something this big can fall and there is no inkling of it. And then it is like crash bang. And I think they're paying their dues for their crookedness," she said.

Ms. Smith, who counts WorldCom employees among her customers, has no doubt who is to blame for the company's collapse. "The crooks at the top. The people who think they can cover it the fraud up and get away with it stealing. Who weren't honest or straight. Who thought getting a profit was not enough, they wanted the big bucks profit, to go for the gold," she said.

Next door is Omia's restaurant. At lunchtime this down home American café is crowded with high-tech and blue collar workers. Bill, who installs air conditioning, said WorldCom's troubles have not yet affected his business.

"Well, I have MCI phone service. But I'm not expecting any major changes short-term. But my parents do own WorldCom stock. So they're not very happy," he said.

Several million Americans have MCI long distance phone service. WorldCom's shares once worth $60 are now essentially worthless.

Farouk, a manager of Omia's, admits that business has already been influenced by layoffs and uncertainty at WorldCom. "We'd be lying if we said no. In fact, the bankruptcy has affected everybody's business. Everybody is crying. We won't be doing the volume of business we did last year and the year before. I hope it comes back. That's my dream, because I've lost money in the stock decline as well," he said.

High tech growth has fueled an extraordinary boom in Ashburn over the past five years. Shopping centers, roads and houses are still under construction as farm land is being cleared for more development. However, the bad news from WorldCom and AOL is sobering this boomtown and giving people pause. They worry about more layoffs and more bankruptcies and a downturn in home and property prices.