[7/5/01] Goodbye Internet, Hello Stock Boost!
By Deborah Asbrand
Jul 05 2001 08:00 AM PDT
Richard Li's Pacific Century CyberWorks issues pink slips and retreats from its dreams of Internet glory, and the market likes it.
Pacific Century CyberWorks announced it would ax 340 employees, and the stock market partied, whooping it up and goosing the company's share price 8 percent. Why such enthusiasm for the Hong Kong telco's pink slips? The company is also shrinking its Internet unit. Woo-hoo! Fireworks, anyone?
The widespread coverage of PCCW's comparatively modest layoffs was due to the holiday news slump facing U.S. scribes, and to the company's media-genic chairman. PCCW head honcho Richard Li is young (34) and very rich (his father is Hong Kong's "most powerful businessman," as the New York Times put it). What reporter could turn away from the comeuppance of a man the Times tagged a "brash tycoon"? Less than a year ago, Li and PCCW had plunked down $38 billion to buy Hong Kong's local phone company, Cable & Wireless HKT, in the kind of David-buys-Goliath move that reporters relished and Netties proclaimed was the way of the new world.
Now Li has shrugged to the Times that he can't quite figure out why he did it. But the Wall Street Journal recapped the story for us in a moment of 2000 nostalgia: The idea was that users would flock to Cable & Wireless's phone business to get a gander at the super-duper fabulous programming CyberWorks would broadcast through its pipes. (Remember synergy?) PCCW now says its elaborate plans for a global satellite and cable TV empire, known as Network of the World, or NOW, are essentially kaput. The Times was full of pejoratives for the programming, calling it "less pioneering than peculiar" and noting that critics wagged that NOW really stood for "no one watching."
The Times also called PCCW "Asia's most spectacular Internet flame-out," and the specter of further layoffs preoccupied Asian outlets. The company's labor union warned that the job cuts were just the beginning for the PCCW's 15,000 workers, according to Hong Kong iMail, and instead of "American-style, extensive layoffs," there'd be a series of bite-sized ones. The iMail also noted that the firings come 11 months after Li had vowed no layoffs for one year. That brought one bit of luck to the laid-off employees: To avoid breaking his pledge, Li is keeping the sacked staff on paid leave until Aug. 20. Lucky for them, the headlines over that broken promise would have been huge.
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