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Is AT&T Top Heavy?

Light Reading
News Analysis
Light Reading
12/30/2003

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
To the 36,000 “managers” at AT&T, watch it! No getting above yourselves now: This definition does not necessarily apply to you.

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

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erbiumfiber
erbiumfiber
12/4/2012 | 11:07:49 PM
re: Is AT&T Top Heavy?
It's merely "a change in the timing of our salary merit increase cycle" (direct quote from "Dave's" memo). LOL.

aswath
aswath
12/4/2012 | 11:07:49 PM
re: Is AT&T Top Heavy?
Ma Bell's definition of management confused Judge Green during the breakup. So called management (like Bell Labs MTS population for example) had to petition him to exclude them from his definition of management. So this is a long standing confusion.
lastmile
lastmile
12/4/2012 | 11:07:45 PM
re: Is AT&T Top Heavy?
Unions have always been known to make a mess of each and every company that they represent. The superficial well being of any employee who belongs to and supports his/her union is always short lived because Unions are known to achieve their objectives by inducing some kind of a threat to the management without really being a part of it.
Unions always have the last say because they are good at crushing any company out of existence. A well known airline called 'Eastern' is a good example.
technonerd
technonerd
12/4/2012 | 11:07:44 PM
re: Is AT&T Top Heavy?
The superficial well being of any employee who belongs to and supports his/her union is always short lived because Unions are known to achieve their objectives by inducing some kind of a threat to the management without really being a part of it.

And without unions, pay, benefits and working conditions go to hell while the fat cats just take more and more. You know, sort of like what's happened in the United States over the past 30 years or so ...
lighten up!!
lighten up!!
12/4/2012 | 11:07:44 PM
re: Is AT&T Top Heavy?
The word management doesn't imply a manager in the sense of someone managing people. Almost everyone in a company is managing something whether it is products, services, billing...So to think AT&T is top heavy because it has 36000 management employees is ludicrous. Many of these so called management employees are grunts who probably have to work their butts off while a few at the top layers create the necessary bureaucracy to justify their existence.
BobbyMax
BobbyMax
12/4/2012 | 11:07:39 PM
re: Is AT&T Top Heavy?
AT&T has been unfortunate since 1978 to have very bad CEOs. They mostly came from the operating companies with very little education and skills. There were thousand of attorneys were getting rich. At thhat time AT&T used to be very rich company and money was not any problem. IT gave up to the pressures of the US Government and divided the domestic market into seven different regions. After this happened the company started going down the hill.

"dr." Dornan is not capable of managing the company. It stopped to compete against MCI and Sprint etc.Its long distance is almost gone. It fragmented its business without any consideration.

Considering the overall work responsibilies AT&T management workers are overpaid, WhatAT&T needs workforce reduction at the top level. It is time for Mr.Dornan to go.
puddnhead_wilson
puddnhead_wilson
12/4/2012 | 11:07:38 PM
re: Is AT&T Top Heavy?
well you would be the resident expert in that area of judgement, bobby! LOL
jim_smith
jim_smith
12/4/2012 | 11:07:37 PM
re: Is AT&T Top Heavy?
As others have pointed out, at AT&T, management employees get a salary, while the "non-management" employees get paid by the hour.
janerino
janerino
12/4/2012 | 11:07:37 PM
re: Is AT&T Top Heavy?
The main reason AT&T designates employees as managers is to avoid having to pay them overtime.
WiserNow
WiserNow
12/4/2012 | 11:07:31 PM
re: Is AT&T Top Heavy?
This same crazy nomenclature was passed on to Lucent. All the programmers, hardware engineers, QA engineers, tech writers and other salaried employees are called "Management". Technicians, admins, and union grunts are non-management.

The sad thing at Lucent was that in the downsizing, the nomenclature hid the fact that 'D' (director) and 'E' level managers eliminated lots of "management" positions while they protected their own positions.

So now, you have 'D' level staff reporting to 'D' level staff reporting to 'E' level staff reporting to 'E' level staff reporting to an Officer, reporting to Jim Brewington (Wireless) or Janet Davidson (Wireline), reporting to Pat Russo.

Who does the work? Off-shore labor.
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