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AT&T to Cut 12,000 Jobs

AT&T Inc. (NYSE: T) stock dipped slightly this morning on news that the telecom giant is planning a 4 percent layoff.

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

Pete Baldwin 12/5/2012 | 3:25:48 PM
re: AT&T to Cut 12,000 Jobs Separately from this, I think I've been seeing analysts report that they're sensing some restraint in the U-verse and FiOS buildout plans for the near future. This could add up to a pretty grim year for capex.
rjmcmahon 12/5/2012 | 3:25:45 PM
re: AT&T to Cut 12,000 Jobs For some anecdotal evidence on U-Verse, I ordered it after T sent out two recents grads to my house to help me do the bundling arithmetic. I figured why not order and let's see what happened. They did an on the spot credit check and scheduled a date to install. Needless to say they never showed up nor did they call to reschedule.

It seems like we have a generation of people, from the Fed on down, who equate output with financials with no questions asked. Greenspan, at 80, has to finally modify is ideology that anybody who actually worked for a living would have learned at 16. The Feds are now talking about printing money so they can turn around and buy the treasuries they issue (to keep up demand for these "products.")

AT&T could put people to work to install modern comm networks. Instead they'll cut staff to satisfy Wall St. Hasn't Wall St. already shown they're little more than con artists? Why would anybody trust these guys and their measurements of human productivity? Jeez, talk about cults.
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