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Level 3 Exec Shakeup Raises Concerns — Layoffs Coming?

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Kevin O’Hara, co-founder and COO of Level 3, has resigned, the Broomfield, Colo.-based backbone services company said today. His exit raises questions about Level 3 in general and the state of multiple acquisitions made by the company over the past couple of years. It also makes one wonder about company’s CEO succession plans.

“Kevin O’Hara has worked closely with me for more than 20 years and this was obviously a difficult decision for both of us,” said Jim Crowe, chief executive officer of Level 3. “Kevin is one of the founders of our company and has made enormous contributions to its success. At this time, however, Kevin and I have agreed that a different perspective will be of benefit to our company.”

Neil Hobbs, currently executive vice president, sales and network services, has been appointed to the newly created position of executive VP of operations, which will see him take over some of O’Hara’s responsibilities. CEO Crowe, meanwhile, will assume the additional title of president.

Level 3 recently reported that it was having trouble fulfilling orders. Given that part of that business falls under “operations,” O’Hara might have taken the bullet. The slowing economy puts Level 3 (and other telcos) at high risk, and the company notably has about $7 billion in debt that will start to come due later this year.

Ironically, while O’Hara, once viewed as the crown prince, is leaving Level 3, CFO Sunit Patel is going to stay with the company. In October 2007, Level 3 announced that Patel was leaving the company. The reversal of Patel’s decision tells me that there was some sort of a disagreement in the executive suite at Level 3. (I am being polite here!)

The disagreement might have been over possibility of layoffs. I have heard for quite some time that Level 3 is contemplating a big reduction in its head count. These have been postponed for a while now. (Anyone with more details on the situation inside Level 3 drop me a note.)

One Response to “Level 3 Exec Shakeup Raises Concerns — Layoffs Coming?”

  1. While the change does throw the succession planning at Level 3 into question, I doubt that the disagreement between the execs was about layoffs. Level 3 has already laid off on the order of 600-700 employees since December, and they may have 400-500 more in planned layoffs for the rest of the year, but I’m betting that was already baked into a plan that Crowe, O’Hara, and Patel had long since bought off on. More on my blog at