AT&T Broadband Pares Cable Crew

Staff cuts in Atlanta are the latest in a stream of bad news for the cable broadband market

January 5, 2001

2 Min Read
AT&T Broadband Pares Cable Crew

AT&T Broadband, formerly MediaOne, has cut 309 jobs in Atlanta in a move to further streamline itself for what it calls "a highly competitive market" for hybrid fiber coax (HFC) services.

The cuts are the latest in a stream of negative news to emerge from the HFC market in recent weeks, starting with AT&T Broadband's announcement in November that it was halting equipment orders (see Market Digests AT&T Broadband News).

HFC networks furnish broadband access over cable TV networks, combining fiber at the operator's head end with coaxial links to customer homes and businesses. It's a market that CIBC World Markets says could double in growth annually through 2004. But the recent run of bad news (see Dark Cloud Over HFC) indicates that growth will come at a price.

"The broadband access marketplace is extremely competitive," says AT&T Broadband spokesman Reg Griffin. He says AT&T Broadband has had to rethink its strategy in light of competition not only from other HFC carriers but from satellite and wireless service providers, which also are seeking positions in the burgeoning market for next-generation Internet access.

"Since the finalized merger [of MediaOne with AT&T] this summer, we've done a very comprehensive top-to-bottom review of where our business is and where it needs to be," says Griffin. "We identified 309 jobs in Atlanta we felt were not contributing to our goal of improving customer service."

The cuts, completed yesterday, affect the entire business in Atlanta, Griffin says, including field technicians, dispatchers and call center personnel, finance and human resources, marketing, and "some management." At the same time, though, he notes that about 35 to 40 new positions are being filled, including technicians seeking to intervene against piracy of cable TV services. "Illegal service stealing is a huge drain on our finances," he says.

Atlanta is considered a "mid-sized" market for the cable provider and represents less than 4 percent of its nationwide workforce of approximately 45,000, spread across most major U.S. cities. No further staff cuts are anticipated in other areas, the carrier says.

Analysts say it may be too soon to gauge how much today's news reflects the HFC market in general. "We'll just have to see," says Lawrence Harris, VP at Josephthal & Co.. He says AT&T Broadband is trying to prepare for its spinoff from AT&T next year (see AT&T to Split 4 Ways). "I'd expect to see a range of cost-cutting activities as they prepare to become an independent unit."

In midday trading, shares of AT&T Broadband's parent company, AT&T Corp. (NYSE: T), were trading at $20.12, down $0.88 (4.17%).

-- Mary Jander, senior editor, Light Reading

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