MCI WorldCom, created in September by WorldCom Inc.'s $40 billion acquisition of MCI Communications Corp., declined to comment specifically on the expected job cuts.

"The company has previously said it would take a careful review of the combined organisation. While that review is ongoing, it is premature to comment" on potential job losses, MCI WorldCom spokeswoman Jamie DePeau said.

The Jackson, Miss.-based company aims to cut anywhere from 770 to 2,300 jobs from its workforce of 77,000, the sources said. The job losses would come "sooner rather than later," one source said.

MCI WorldCom stock rose $1.22 to $63.875 on Nasdaq as investors cheered signs the company appeared to be on track with its cost-cutting plans, industry analysts said. WorldCom's gains came despite weakness in the broader market.

MCI WorldCom had said it expected to cut $2.5 billion in expenses in 1999, and $5.6 billion by 2002. Savings will come from transferring customer voice and data traffic from networks MCI and WorldCom had leased to networks they now own together.

"While we are cutting costs in areas like the network and line costs, we are executing on an aggressive plan to grow the company -- with new products, services," DePeau said.

As the company expands in faster-growing businesses -- such as data, Internet and international -- MCI WorldCom expects to add to its total work force over time, DePeau said.

MCI WorldCom also plans to cut expenses by streamlining duplicate legal, accounting and human resources functions.

WorldCom's general administrative expenses were 18 per cent of sales while MCI's were as high as 30 per cent, compared AT&T Corp., the biggest long-distance company, with 24.4 per cent.

"They signaled long, long ago that they planned to get costs out of the business. Whatever they have to do ... they are going to do," said Anthony Ferrugia, a telecommunications analyst with A.G. Edwards.

WorldCom, which grew by acquiring about 50 companies, became a nimble competitor to industry giants such as AT&T by keeping costs and expenses low while still expanding.

MCI WorldCom chief executive Bernie Ebbers "built WorldCom through a series of mergers, and cutting expenses to the bone. That's what he is doing here. He's keeping his promise by cutting expenses," said analyst Jeffrey Kagan.

MCI WorldCom must be careful to reduce overlap but not gut the organization or hurt morale, and retain management talent that built both companies, analysts said. Executives who feel they no longer have the same freedom or responsibility at the combined company would have ample job opportunities at rivals or new, emerging start-ups looking for seasoned talent.

MCI WorldCom already lost MCI's former chief financial officer, Douglas Maine, who left to become CFO of International Business Machines Corp. Gerald Taylor, MCI's former chief executive, plans to retire at year-end but remain on the new company's board.