AT&T to Cut 12,000 Jobs
Officials said they intend to cut 12,000 jobs in an effort to bring 2009 expenditures below the 2008 level. AT&T is promising to detail its efforts next month, when it reports earnings for the fourth quarter.
However, the company did note that the job cuts, which will start up this month and extend through 2009, will cause AT&T to incur a $600 million severance-related charge in the fourth quarter.
AT&T didn't specify where it is chopping heads, but noted that it is hiring in some parts of the company, particularly in the areas of wireless, video, and broadband.
AT&T shares were down 34 cents (1.2%) to $28.74 each in morning trading.
Layoffs are becoming common news, due to the bleak outlook for the economy. (See Cox to Cut 460 Jobs and Qwest Enlists Layoffs, Posts Q3.) AT&T attributed its upcoming cuts to a mix of "economic pressures, a changing business mix," and the need for a "more streamlined organizational structure."
Layoffs were foreshadowed a bit in October, when AT&T announced a reorganization that would divide the company into four business units: Consumer, Business, Infrastructure, and Diversified Businesses. AT&T didn't reveal any layoff plans at the time, but did make some significant changes up top, including the appointment of Ralph de le Vega as head of all AT&T's consumer businesses, including U-verse. (See AT&T Ralphs Up a Convergence Strategy.)
Although AT&T has been able to increase its IPTV subscription base -- it ended the third quarter with 781,000 U-verse subscribers and remains on track to end the year with more than 1 million -- wireless has remained the company's key growth engine. (See Wireless Boosts AT&T in Q3.)
AT&T posted third-quarter revenues of $31.3 billion, up 4 percent year-over-year, and net income of $3.2 billion, up 3.2 percent.
— Jeff Baumgartner, Site Editor, Cable Digital News