Story last updated at 1:19 p.m. Saturday, August 31, 2002

Financial setbacks force ACS to reduce staff
By Marcus K. Garner
Morris News Service-Alaska

Alaska Communication Systems Inc. will eliminate some of its store-front customer service positions in a 7 percent staff reduction planned by the end of this year, a company official said.

The telecommunications company will scale down its workforce of more than 1,100 statewide, said ACS Vice President Mary Ann Pease.

"What we're doing is looking at restructuring our storefronts," Pease said. "There are going to be no appreciable differences."

The cutbacks mean the Anchorage store will lose two jobs, Juneau and Soldotna will lose one apiece, and the Kodiak store will be open only part time. Beyond these expected layoffs, ACS has not filled many positions left by those leaving the company for whatever reason.

"We're not talking about a huge number," Pease said. "And we are still looking to realign people so that we don't have to have layoffs.

"Many of those positions that remain unfilled are part of that 7 percent. We have done everything possible to keep physical bodies from walking out the door."

She said the company stores will still have staffing and customer service but will be focused more on wireless service. Customers still will be able to make payments in the stores, but concerns with land-line accounts will be directed to representatives in the company's Fairbanks call center, Pease said.

Recent setbacks have ACS falling on hard times, reporting a $105 million charge-off in its second-quarter financial statement that left its net income at $3.5 million, still up from last year. Pease said the scale-down could shave company money from its more than $77 million operation expenses.

"We anticipate that reduction would allow us to reduce annual cost by over $6 million," she said.

Earlier this month, the company began preparations to sell its cable television holdings, saying the venture was not making money. In June, the Federal Communica-tions Commission ordered the company to pay back $1 million to competitors for overcharging the use of ACS lines for interstate calling service. Alaska regulations require that ACS lease its local lines to competitors at a fixed rate set by the Regulatory Commission of Alaska. That rate recently was raised from its 1999 rate of $13.85 to $14.92, far below the $20 expectations Wall Street analysts predicted.

Pease blamed the RCA for her company's current predicament. She said the purpose of the regulation was to open up the possibility for companies to introduce new technology.

"We're not seeing that happening," she said. "If we were being fairly compensated for the use of our facilities, what we're going through wouldn't be happening. We are strong proponents of competition but not of subsidized competition."

Pease said some of the reduction already has taken place, but ACS won't realize the full impact until the end of the year. She said the end goal is to better serve residential customers.

"When we look at servicing our residential telephone customers, to maintain profitability -- which we have not been doing -- we have to make some changes."

Marcus K. Garner is a reporter for the Peninsula Clarion.

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