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AT&T Takes Charges, Lays Off

Takes a $240M charge following 3,500 'planned employee separations' (layoffs); Latin American assets impaired to the tune of $1.1B

January 6, 2003

1 Min Read

BEDMINSTER, N.J. -- AT&T today said it will report a pre-tax restructuring charge of approximately $240 million in the company's fourth quarter 2002 results. The charge is primarily associated with approximately 3,500 planned employee separations. Affected employees, slightly more than half of whom are in management, were notified last year that their organizations will be reduced in size; most will leave the payroll in the first half of 2003. The company said it expects the restructuring charge to have an earnings-per-share impact of approximately $0.20 in the fourth quarter of 2002. AT&T said the employee separations are largely the result of improved processes and automation in provisioning and maintenance of services for business customers. Also announced separately today, AT&T and Covad extended their agreement so that AT&T can offer high-speed Internet access to more of its 50 million consumer customers. Because AT&T will primarily offer services using Covad's network, AT&T will incur an asset-impairment charge of approximately $200 million, or about $0.15 per share, related to the value of AT&T's DSL network assets. As previously indicated, AT&T will take an asset-impairment charge of approximately $1.1 billion in the fourth quarter associated with its past investment in AT&T Latin America. This charge is expected to have an earnings-per-share impact of approximately $1.40 in the fourth quarter of 2002. AT&T Corp.

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