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Telephone provider Frontier Corp. cutting 700 jobs

October 14, 1997

ROCHESTER, N.Y. (AP) _ Frontier Corp., the nation’s fifth-largest long-distance telephone company, said today it is cutting more than 700 jobs, or 8 percent of its work force.

In an overhaul designed to refocus on its local and long-distance phone businesses, Frontier will shed a variety of non-core products, including its prepaid calling cards, and take a fourth-quarter charge of $55 million.

``Product lines that distract from our core business and inefficiently utilize our resources can no longer be part of our business portfolio,″ said newly appointed chief executive Joseph P. Clayton.

Clayton succeeded Ronald Bittner, who died Aug. 31 while being treated for brain cancer.

The company said it expects third-quarter earnings to fall to 24 cents a share. Wall Street had been anticipating a return of 28 cents when the results are posted next Tuesday.

Frontier said it intends to phase out all low-margin, price-driven consumer long-distance segments, such as its Budget Call product.

It blamed lower earnings on a jump in costs associated with taking on more long-distance service. Its prepaid calling card business and other non-core units also had cut into profits, it said.

Clayton made several changes in management, hiring David Carey from AT&T to help streamline its marketing efforts. Among those who are departing are Dale Gregory, who was senior vice president of corporate development, and Kevin Bennis, president of Frontier Communications.

Frontier has more than 1.5 million customers for its long-distance, local telephone and cellular services and revenues of almost $2.5 million. It employs nearly 8,000 people.

In 1995, Frontier changed its name from Rochester Telephone Corp. and Rochester became the first place in the nation to open its local phone market to competition.

The company suggested the open market experiment so it could be freed from its corporate structure as a regulated utility. However, despite competition from incomers like AT&T and Time Warner, Frontier retains more than 90 percent of the region’s 350,000 residential customers.

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