AT&T to cut 12,000 jobs, 4 percent of staff

Published 12:00 am Thursday, December 4, 2008

AP Technology Writer

NEW YORK (AP) ó AT&T Inc. joined the recession’s parade of layoffs Thursday by announcing plans to cut 12,000 jobs, about 4 percent of its work force.

The Dallas-based telecommunications company ó the largest in the U.S. ó said the job cuts will take place in December and throughout 2009. The company also plans to reduce capital spending next year.

Spokesman Walt Sharp said the layoffs will be “across the company and across the country,” but would not specify what departments and cities would be most affected. These layoffs come on top of 4,600 jobs the company said in April it would eliminate.

The new cuts come as AT&T finds itself pulled by two currents at once. Not only is the recession leading businesses and consumers to curtail spending, but a long-term trend in the telecom industry is also at play: AT&T, which provides local phone coverage in California, Texas and 20 other states, has been seeing many customers defect from landline phones to wireless services. In the last quarter, AT&T basic voice lines in service dropped 11 percent.

Reflecting that shift, the company noted Thursday that even as it slashes some jobs, it would still be hiring in 2009 in parts of the business that offer cell phone service and broadband Internet access. AT&T, whose shares are down about 30 percent this year ó while the Dow Jones industrial average is off 35 percent ó remains profitable, and benefits from being the sole U.S. wireless carrier for Apple Inc.’s popular iPhone.

AT&T plans to take a charge of about $600 million in the fourth quarter to pay for severance costs. The company noted that many of its non-management employees have guaranteed jobs because of union contracts. All affected workers will receive severance “in accordance with management policies or union agreements,” the company said.