Is AT&T Top Heavy?
Long-distance phone giant AT&T Corp. (NYSE: T) revealed last week that it would be freezing pay raises until April 2005, for 36,000 of its "management" staff. The story prompted one of our more curious readers to email us in disbelief (see AT&T Freezes Pay ).
”Is it true that AT&T is more than half management employees? How is this possible?” asks Michael Hochberg, of the California Institute of Technology. “Am I misreading this?” he asks. “If this is true… how does a company end up as more than half management?"
It’s a very good question, which Light Reading promptly put to AT&T. Technically speaking, according to AT&T’s definition of the word “management,” it does indeed have 36,000 managers, out of a total of 61,000 employees. That's only slightly larger than a one-to-one ratio of management employees to the rank-and-file, as calculated with our lightning fast math skills.
It definitely sounds like way too many chefs and not enough sous-chefs.
Before we get carried away, lets see what AT&T says about it. AT&T characterizes management employees, generally speaking, as “those not covered by collective bargaining agreements.” Translated, this means any employee not represented by the two unions (CWA and IBEW) with which AT&T has agreements in place (for wages, pay raises, holidays, etc.)
“There may be some non-management employees who have chosen not to align themselves with a union, but for the most part management equals nonunion,” says AT&T spokeswoman, Sue Fleming.
AT&T’s definition differs dramatically from Webster's dictionary definition of the word "management," which has the following meanings:
- The act, manner, or practice of managing; handling, supervision, or control: management of a crisis; management of factory workers
- The person or persons who control or direct a business or other enterprise
- Skill in managing; executive ability
So what do these folks actually do, other than avoid unions? Hard to tell really. But that's part of the charm of Ma Bell's age-old bureaucracy.
The memo, sent by AT&T’s CEO Dave Dorman, describing the pay freezes, is rather long-winded, but for anyone interested in more AT&T weirdness, the relevant part can be found towards the end.
— Jo Maitland, Senior Editor, Boardwatch