Company officials have admitted hiding some $4 billion in expenses over the last five quarters, and this disclosure could be devastating for the company, its employees and its stockholders.
The cloud hanging over WorldCom may be even darker than the ones hanging over the Clinton Headquarters today.
Though the company had been in financial trouble for some time, the news that it had hidden $3.85 billion over the last year came as a shock.
On the New York Stock Exchange, the news prompted its stock to plummet in pre-trading to only nine cents a share. As a result, it never opened for trading Wednesday. Some stockholders could not believe it.
Employees were instructed by company officials not to speak to assembled media outside the WorldCom headquarters.
But in Washington, reaction was swift. President Bush has promised a full investigation, and several lawmakers, including Mississippi Congressman Ronnie Shows, have called for immediate corporate accountability.
Analysts call the disclosure one of the biggest accounting frauds in history, and in the wake of the announcement, WorldCom's chief financial officer was fired, and its company controller resigned.
They will not be the last to lose their jobs, WorldCom says it will cut 17,000 jobs from its workforce Friday, in an attempt to cut the budget and pay off its massive debts.
But most analysts say bankruptcy is what's looming next for the beleaguered company.