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AT&T Chief Promises Job Cuts

AT&T Corp.'s (NYSE: T) Chairman and CEO Dave Dorman said Wednesday that the telecom market continues to be “plagued by a variety of challenges” including regulatory pressure, oversupply, and a stagnant economy.

Addressing the Goldman Sachs & Co. telecom conference in New York, Dorman said AT&T will continue to cut costs by eliminating headcount through improvements in back-office efficiency. He said the carrier will spend $700 million to drive costs out of its operations.

AT&T plans to reduce its headcount to 65,000 by the end of the year, roughly a 9 percent decrease from 2002 figures. The job eliminations will result in an annualized cost savings of $500 million.

Dorman would not be drawn on Wall Street rumors that AT&T is in talks to merge with BellSouth Corp. (NYSE: BLS). "I think I've heard that one before," he gaily quipped, moving swiftly on.

Read more of his stunning bon mots on Boardwatch.

— Jo Maitland, Senior Editor, Boardwatch

BobbyMax 12/4/2012 | 11:22:15 PM
re: AT&T Chief Promises Job Cuts Mr. Armstrong and subsequently Mr. Dorman have done tremendous wrong to AT&T. Mr. Armstrong brought down the company while AT&T Board was drinking whisky. Mr. Dorman was not able to make appropriate business projections. It is a failure on the part of the entire organization. If 10,000 people are needed now, they certainly were not needed a year ago. Since the AT&T Booard gets a lot of benefit from the company that is why it does not want to take any action.
opticalwatcher 12/4/2012 | 11:22:09 PM
re: AT&T Chief Promises Job Cuts I've heard a little bit about the Bell South and AT&T buyout rumor. Can anyone shed light on why this rumor is out there and whether there is any validity to it? thx in advance.
fw23 12/4/2012 | 11:22:08 PM
re: AT&T Chief Promises Job Cuts >Is there anything on the legislative horizon >that suggests mergers of this magnitude in the >telecom sector (phone comps) will be allowed? thx

Well, Bush is in Office and Fritz Hollings is
retiring from the Senate. Once Hollings is out
of the way in the senate, its almost certain
that some sort of new deregulation package
will be forced through and there is no doubt
that Bush will think twice about signing.

Also, I think if the RBOCs get relief in enough
states, certain regulatory issues evaporate.
opticalwatcher 12/4/2012 | 11:22:08 PM
re: AT&T Chief Promises Job Cuts "The partners are all figured out, but the marrage
will not happen unless the goverment boys go
along with it".

Is there anything on the legislative horizon that suggests mergers of this magnitude in the telecom sector (phone comps) will be allowed? thx
fw23 12/4/2012 | 11:22:08 PM
re: AT&T Chief Promises Job Cuts >I've heard a little bit about the Bell South and >AT&T buyout rumor. Can anyone shed light on why >this rumor is out there and whether there is any >validity to it? thx in advance.

The rumor has been around forever. the RBOCs
each have long-distance/data "partners" scoped out
that they would M&A with if the regulatory
environment reached a point that favored it.

Bell South would Grab AT&T. And Verizon & SBC
would grab MCI(if it survives) and Sprint.
Since Qwest is both Qwest and US West, it probably
will not merge with anyone.

The partners are all figured out, but the marrage
will not happen unless the goverment boys go
along with it.

sam5210 12/4/2012 | 11:21:55 PM
re: AT&T Chief Promises Job Cuts Give Dorman a little while to admit it, but believe me, it IS in the works with BS.
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