By Mike Boyer
The Cincinnati Enquirer

Convergys Corp. Thursday announced a cost-cutting program that will eliminate 950 jobs, or 2.2 percent of its global work force, and the closing and consolidation of some operations during the next year.

The billing and customer care provider, spun off from Cincinnati Bell Inc. in 1998, employs 1,800 in Greater Cincinnati. The company said it was too early to say how many jobs here will be affected by the cuts, planned through a combination of attrition and layoffs.

The cuts, triggered by the global slowdown particularly in telecommunications, its largest market, will mean a charge against - or reduction of - earnings in the current quarter of between $90 million and $110 million.

Convergys' shares closed Thursday at $16.53, down $1.03, or 6 percent.

The company has been exploring combining its Greater Cincinnati operations - now spread over three sites - into a single location or campus, possibly downtown.

A spokeswoman said that project hasn't been postponed because of the restructuring effort.

"We have made no decision" on a headquarters consolidation, spokeswoman Renea Morris said. "I haven't heard that it's on hold."

As part of the restructuring, Convergys said it is undertaking a review of all its facilities worldwide to find ways to streamline operations and improve efficiency.

That review, slated to be completed this month, could lead to the closing and/or consolidation of some offices, the company said.

Ms. Morris said the headquarters consolidation project is included in the review.

Earlier this year, Convergys chairman James Orr said he hoped to make a decision on headquarters consolidation by the end of this year.

Convergys, which has 44,000 employees worldwide, operates 46 customer contact centers, two data processing centers and sales offices.

In a statement, Mr. Orr said the cost-cutting effort was necessary in the face of the slowing economy.

"Global markets, especially in the communications sector, continued to weaken in 2002," Mr. Orr said. "At the same time, wage, health care, pension, insurance and other overhead costs continued to rise."

Last month, Amdocs Ltd., a leading Convergys rival, said it would cut 400 jobs, or 4 percent of its work force, after eliminating almost 1,000 jobs earlier this year.

Ms. Morris said the projected job cuts include professional and administrative staff positions in its data processing and customer care operations. The cuts don't include Convergys' call center agents. The company employs about 500 at its Norwood call center.

Since its formation, Convergys, which processes more than a million client bills and handles as many customer contacts daily, has enjoyed double-digit growth rates.

But in the past year, as telecommunications companies' spending has been cut and wireless subscriber growth has slowed, so has Convergys' growth.

In the three months ended Sept. 30, Convergys' revenues were flat at $561 million, and operating earnings declined 10 percent to $90 million.

At the end of the third quarter, Convergys said it still expected to earn 31 to 33 cents a share this quarter and meet full-year expectations for earnings of $1.35 to $1.42 a share.

The company said that savings from the cost-cutting would be realized throughout 2003, but that profit margins will remain under pressure.

E-mail mboyer@enquirer.com.